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January 20, 2010

President Obama’s First Year Clean Energy Progress Report: 3 E’s and an A?

I am hope you heard the following statement several times during the 2008 presidential campaign.

America has always risen to great challenges, and our dependence on oil is one of the greatest we have ever faced. It’s a threat to our national security, our planet and our economy. For decades, Washington has failed to solve this problem because of partisanship, the undue influence of special interests, and politicians who would rather propose gimmicks to get them through an election instead of long‐term solutions that will get America closer to energy independence -- Barack Obama and Joe Biden: New Energy for America

This campaign was the first time Economic, Environmental, and Energy/national security (the three EEE’s) were connected as one issue -- and the connection was continued to make clean energy and alternative transportation fuels real solutions.  I believe voters were able to make this connection and vocalize that these issues were on the top of their agenda too.

This evolution was also a first for environmentalists. This was the first time environmental organizations were officially embracing clean energy and alternative transportation fuels as solutions and publically recognizing that lowering fossil fuel use was the way they could achieve their air pollution and climate change goals.  People in the environmental community even started having the word “energy” included in new titles on their business cards.  But, in just seven short months the honeymoon was over as -- Disillusioned Environmentalists Turn on Obama as Compromiser. So I started to keep track of headlines so after the environmentalist honeymoon I could see where the Administration stood on connecting the dots on the three EEE’s -- Economic, Environmental and Energy/national security.  Are the dots still being connected?   Is the Obama Administration on the right path?  The  compilation of headlines and stories below are from July 2009 to January 20, 2010.

Economic security is one of the E’s that was often missed by the environmental community – but that may be changing.  Without economic stimulation attached to environmental security, national surveys show fewer consumers will care, and fewer policy makers will vote with only their environmental heart in hand.  We are somewhat lucky that it is highly unlikely that aside from clean energy and renewable alternative transportation fuel technologies – there are very few other choices that can generate the magnitude of wealth our economy needs to sustain its quest for environmental protection, economic stimulation – and defeat our reliance on foreign sources of oil, which is holding our international diplomacy hostage.

New Report Shows Recovery Act Supported 63,000 Clean Energy Jobs Last Quarter:
Sierra Club, January 13, 2010

The White House Council of Economic Advisers has released a new quarterly report highlighting the success of the American Recovery & Reinvestment Act at creating jobs and fueling economic growth. The report, which includes analysis from outside economists, shows that the Recovery Act has saved or created  1.5 to 2 million jobs through last quarter. 63,000 clean energy jobs were created by the $5 billion (out of approximately $90 billion total) in clean energy investments spent under the Recovery Act so far. The report estimates that, in total, the Recovery Act's clean energy investments will create 719,600 job-years (one person employed for one year) through 2012.

And then...

In an effort to move 31 renewable energy and transmission projects into high gear, the Obama administration has put them on a fast track permitting process. But such deals, which would take place on federal lands, have some opposition -- and it's coming from those in green corners, who say that certain ones should be relocated.

Everyone still needs to work on connecting the energy security dot to national security.  If the goals for energy security do not become as important and reverent as the goals for national security, the environmental effects from the 3rd Persian Gulf War and resulting scale up of nuclear weapons in the Middle East may make the effects from Climate Change appear distant and miniscule.

Now it's time for President Obama’s first year progress report.  The parade of positive headlines say – nice first year – keep up the good work! The President should get three E’s for helping the United States get closer to achieving Economic, Environmental, and Energy Security and an A for effort.  And ethanol and next generation biofuels should get an A too for the sum of their parts E+E+E.

Survey Finds That Support for Cap-and-Trade Hinges on Economy

Investors Representing $13 Trillion Call for Climate Action Now

Obama Administration Awards $2.3 Billion for New Clean Technology Manufacturing JobsLabor Department Awards $155 Million to Support Green Jobs

Treasury, Energy Announce More Than $2 Billion in Recovery Act Tax Credits for Energy Manufacturers, Tax Credit Program Will Increase Economic Development, Promote Manufacturing of Clean Energy Equipment

U.S. Department of Labor Announces $100 Million in Green Jobs Training Grants Through Recovery Act

Michigan's climate action plan could result in 129,000 jobs

U.S. Labor Secretary Expects More Green Job Hiring

"Cash for Clunkers" Program Will Create or Save 42,000 Jobs in Second Half of Year

Obama Wants Worldwide End of Fossil Fuel Subsidies

Agriculture Secretary Vilsack Announces $62.5 Million for Renewable Energy and Energy Efficiency Loans and Grants

Obama Administration Delivers More than $106 Million for Energy Efficiency and Conservation Projects in Nine States

Obama implores Senate to pass climate bill

And the seven month accomplishment list goes on and on below, but in the end...by other standards....

League of Conservation Voters Awards President Obama a B+ for First Year in Office

The House narrowly passed a major climate bill

Biofuels Could Cut Global Emissions by 80%:

New Study Shows Cars Running on Cellulosic E85 Have Lowest Carbon Emissions

President Obama Establishes Biofuels Interagency Working Group

U.S. Departments of Energy and Treasury Now Accepting Applications for Funding For Renewable Energy Projects

USDA's Farm Service Agency to Begin Accepting Applications for New Biomass Crop Assistance Program

Federal Funds for Energy Efficiency Set to Rise!

Obama Administration Announces Billions in Lending Authority for Renewable Energy Projects and to Modernize the Grid

U.S. Department of Energy Announces Awards for Up to $11 Million for New Solar Energy Grid Integration Systems

President Obama Declares October National Energy Awareness Month

Funding Up 3 Percent to $2.24 Billion for Renewables & Energy Efficiency in Fiscal Year 2010

Obama Presses Case for Renewable Energy

Novozymes Receives $28.4 Million Advanced Energy Tax Credit to Advance Biofuels Production and Create Jobs Read more

DOE Awards Nearly $80 Million for Advanced Biofuels Research and Fueling Infrastructure Read more

DOE Grants Donald Danforth Plant Science Center and Partners $44 Million to Develop Algal Biofuels Read more

Army Corps of Engineers Grants Coventa Energy Corp. $1.5 Million to Develop Technology for Conversion of MSW to Diesel Fuel for Military Use Read more

USDA Undersecretary Tonsager to Address 4th Annual Iowa Renewable Fuels Summit on Biofuels Interagency Working Group

DOE to Award $187 Million to Improve Car and Truck Fuel Efficiency

DOE to Award $47 Million to Boost IT and Telecom Energy Efficiency

DOE Announces Additional Energy Efficiency Enforcement Action to Protect Consumers

DOE to Support Clean Energy Projects in Costa Rica and the Caribbean

President Obama Says 'Insulation Is Sexy'

EIA Energy Outlook Projects Moderate Growth in U.S. Energy Consumption, Greater Use of Renewables, and Reduced Oil and Natural Gas Imports

Energy Secretary Chu Pledges $350 Million Clean Technology Fund to Sweeten Deal at Copenhagen

Energy Secretary Chu Announces $100 Million for Advanced Research Projects:

Nine Swing Senate Democrats Lay Out Climate Goals for Obama

Obama Administration Announces More Than $600 Million Investment in 19 Advanced Biorefinery Projects - Private Company Investment Brings Total to Nearly $1.3 Billion:

Energy Secretary Chu Announces $620 Million for Smart Grid Demonstration and Energy Storage Projects

U.S. Department of Energy to Invest $18 Million in Small Business Clean Energy Innovation Projects

U.S. Department of Energy Signs Agreement for New Hydrogen Power Plant

Remarks by President Obama New National Fuel Efficiency Standards

Obama Administration Announces More than $38 Million for Energy Efficiency and Conservation Projects in Alaska, Kansas, Utah and West Virginia

National Outdoor Lighting Improvements Would Save $5.1 Billion Annually

New Economic Data Released on Clean Energy Legislation

Treasury, Energy Surpass $1 Billion Milestone in Recovery Act Awards for Clean Energy Projects

U.S. Energy Secretary Chu Announces $528 Million Loan for Advanced Vehicle Technology for Fisker Automotive

Secretary Chu Announces $144 Million in Recovery Act Funding to Transition to the Smart Grid

White House Clears Greenhouse Gas Reporting Rule

House OKs Green Vehicle Research Bill

$100 Million in Recovery Act Funds Go to 43 Transit Projects Chosen to Reduce Energy Consumption and Greenhouse Gas Emissions

DOE Awards Up to $14.6 Million to Support Development of Advanced Water Power Technologies

DOE Launches New "H-Prize" Offers $1 Million for Improved Hydrogen Storage

Report Says Strong Copenhagen Deal Means Jobs, Jobs, Jobs

Interior Department Launches Response Strategy to Addresses Climate Change Impacts on U.S. Lands and Oceans:

DOE to Fund up to $454 Million for Retrofit Ramp-Ups in Energy Efficiency Projects for Businesses and Homeowners

White House, Oil, Gas Industry Spar Over Taxes

On Energy, Obama Finds Broad Support - Poll Shows Backing for Reform Efforts, But Cap-and-Trade Bill Is Harder Sell

U.S. Department of Energy Selects Biofuels Projects to Receive up to $21 Million in Funding

Agriculture Secretary Vilsack Announces Missouri Conversion Facility First with Biomass Crop Assistance Program Producer Payments

EPA to Declare CO2 a Dangerous Pollutant

U.S. Department of Transportation Awards Contract to Prototype Solar Road Panels

Energy Secretary Chu Announces Completion of Critical Energy Conservation Appliance Standards

Agriculture Secretary Vilsack Announces More Than $13 Million to Help Meet Country's Renewable Energy Needs

EPA Raises the Bar for Energy Star Televisions

Poll Shows Support for Energy Bill
Vice President Biden Announces Finalized $535 Million Loan Guarantee for Solar

Secretary Chu Announces Nearly $300 Million in Clean Cities Grants to Support Clean Fuels, Vehicles, and Infrastructure Development

U.S. Department of Energy Announces $6.4 Million for Solid-State Lighting Research

Agriculture Secretary Vilsack Awards More Than $4.2 Million for Woody Biomass Utilization Projects

U.S. Department of Energy Sets Awards To Evaluate CO2 Storage Technology While U.S. EPA Seeks Comments on New Information About Sequestration

Obama Administration Delivers More than $101 Million for Weatherization Programs in Guam and Pennsylvania 

Obama Administration Awards More than $51 Million for State Energy Programs in Alaska, Guam and New Jersey 

U.S. Government Seeks to Limit Federal Energy Use

President Barack Obama's Grandmother Joins the 'Solar Generation' in Kenya

U.S. Department of Energy Announces $37 Million for Small Business Clean Energy Research and Technology

Clean Energy Patent Growth Reaches Record High

Companies Secure Nearly $200 Million for Projects in Advanced Clean Transportation Technologies

President Obama Announces $2.4 Billion in Grants to Accelerate the Manufacturing and Deployment of the Next Generation of U.S. Batteries and Electric Vehicles
U.S. Department of Energy Announces Recovery Act Funding of up to $5.5 million for Ethanol Blends Infrastructure and Outreach

DOE Secretary Chu Announces Up to $30 Billion in Loan Guarantees for Renewable Energy, Transmission Grid, and Advanced Biofuels Projects

Obama Administration Awards More than $162 Million for State Energy Programs in Colorado, Delaware, Indiana, Louisiana, Massachusetts, Pennsylvania, and Puerto Rico

Agriculture Secretary Vilsack Announces Funding Available For Bioenergy Development And Production: 

Energy Secretary Chu Announces More Than $47 Million in Recovery Act Funding to Advance Smart Grid Development

Federal Energy Regulatory Commission Policy Statement Seeks to Accelerate Deployment of Smart Grid Technology

U.S. Department of Energy Announces up to $52.5 Million for Concentrating Solar Power Research and Development
Geothermal Lease Sale Generates More Than $9 Million

U.S. Department of Energy Secretary Announces Nearly $300 Million Rebate Program to Encourage Purchases of Energy Efficient Appliances

U.S. Department of Energy Announces Nearly $14 Million to Go to 28 New Wind Energy Projects - New DOE Study Shows U.S. Leads the World in Wind Energy Capacity

States Awash in Stimulus Money to Weatherize Homes

Recovery Act Announcement: Secretary Chu Announces More than $37 Million for Next Generation Lighting




February 19, 2008

Evolution of the RFS Revolution: Month Two

Being true to our blog mission, we wanted to keep you apprised of developments with the national Renewable Fuel Standard (RFS).

February 19, 2008 – RFS -- month two

Passage of the Energy Independence and Security Act of 2007 (EISA07) was nothing short of historic and heroic.  The passage of EISA07 represents Congressional courage and their belief in the technological prowess and entrepreneurial sprit of the United States.  This legislation also provides all us an insider glimpse (If-we-only-knew-what-they-really-knew-basis) of how desperate things must be on our energy front for Congress to reach such a fast bipartisan agreement that would make significant progress in fighting oil imports and greenhouse gases.  With the ink hardly dry on the President’s signature (December 19, 2007) there are already new hearings (below), new anti-biofuels/ethanol studies appearing in the media, threats of throwing safety nets and hitting off ramps, technical corrections, and new legislation to amend the definition of renewable feedstocks.  As the “Oil lobby looks to delay deadlines for new renewable fuels standard”  ethanol and renewable fuel proponents are responding to keep the debate open and progress on the new RFS moving forward.

Regarding article, “Oil lobby looks to delay deadlines for new renewable fuels standard,” Feb. 13.) Biofuels are critical and necessary alternatives to environmentally hazardous fossil fuels. Concerning the frenzy over the recently released studies regarding biofuel cropland and its impact on greenhouse gases, it’s important to note that the energy bill of 2007 and its renewable fuel standard has specifically addressed these issues. The bill, signed into law, sets life cycle global warming pollution reduction standards for all new biofuels. The architects of the legislation anticipated hurdles and created mechanisms for addressing them.

As far as delaying implementation of the 2009 usage levels, we will have plenty of production in the U.S. to easily meet those requirements. Many more studies have revealed the potential of biofuels, including a joint study released in January by the U.S. Department of Agriculture and the University of Nebraska indicating that greenhouse gas emissions from switchgrass-derived ethanol were 94 percent lower than emissions from gasoline.  While we must continue to research best practices and methods moving forward, it’s simply premature and foolish to write off biofuels and their potential to satisfy our nation’s energy, economic and environmental needs.

THE HILL, By Douglas A. Durante, Executive Director, CFDC, February 14, 2008

The Senate Committee on Energy and Natural Resources RFS Hearing
The Senate recently held an oversight hearing to discuss the new RFS. Senators Tim Johnson (SD) (co-chairman, of the Ethanol Across American education campaign), Larry E. Craig (ID), and Ken Salazar (CO) joined Committee Chairman Jeff Bingaman (NM) and Ranking Member Pete V. Domenici (NM) to address concerns industry and government are having about the final language contained in the EISA07.

Ranking member U.S. Senator Pete Domenici said that the recently passed RFS may need changes in order to be effectively implemented.  Domenici identified a number of areas that may need attention, including very broad waiver authority given to the EPA Administrator, limits on what type of land can be used to cultivate crops, and definitions in the RFS which preclude materials from forest thinning to be used as biomass.  In addition, Domenici said he wants to ensure that the RFS is not weighted against new technologies, such as biocrude derived from algae.

Highlights from testimony from The Honorable Alexander Karsner - Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy

  • One important feature of the President’s proposed Alternative Fuel Standard was the economic safety valve (proposed to be $1.00 per gasoline-equivalent gallon). This safety valve sought to improve the likelihood that the program would not impose unreasonable costs on consumers or result in unreasonable profits for alternative fuel producers. The safety valve in Title II of EISA does not provide the same level of protections to obligated parties or consumers. DOE, EPA, and USDA will coordinate on analysis needed to support the rule making to implement the new RFS program, including an assessment of what gaps, if any, exist in the incentive system in EISA, taking into account the costs of conventional (corn-based) ethanol, and cellulosic biofuels

[It makes you wonder what the safety value is for consumers when gasoline goes up $1 per gallon?]

  • In addition to concerns about the waiver/safety valve, the Department recommends that the definition of woody biomass in Section 201 be modified in order to parallel the definition contained in the Administration’s Farm Bill proposal. This revision would allow us to more readily meet the renewable fuel standard set forth in the law since it encourages producers to use materials from federal lands or non-industrial private forest lands. Thanks for the recommendation, it was a fun and informative read. The Energy Independence and Security Act of 2007 officially put the lid on this food vs. fuel concern.  Corn is the bridge technology to cellulosic ethanol; one would not and will not exist without the other. Some suggested reading.
  • On November 6, 2007, [CFDC Member] Range Fuels, Inc, became the first of the six companies selected by DOE last February, as a part of the EPACT 2005 integrated biorefineries solicitation, to break ground on a commercial cellulosic ethanol plant, one of the first in the nation. The plant is located near the town of Soperton, Georgia, and will draw on gasification technology to convert wood and wood waste from Georgia's pine forests and mills into 20 million gallons of ethanol per year during its first phase of operation. Construction of the first phase is expected to be completed next year.

Ms. Carol Werner - Executive Director, Environmental and Energy Study Institute 

  • A report by the Union of Concerned Scientists (UCS) reinforces the widely-accepted average direct life-cycle emissions reductions (compared to gasoline) of 20% for ethanol from corn starch and 80% for cellulosic ethanol.  These statistics immediately suggest two things  - A) that the emissions screens in the current RFS can be met and B) that cellulosic fuels have the potential to dramatically reduce our greenhouse emissions compared to either gasoline or corn-starch ethanol. Depending on choice of feedstock and agricultural practices, some cellulosic renewable fuels have the potential to substantially exceed the average 80% emission reduction found by UCS. A 5-yr field study jointly undertaken by the USDA Agricultural Research Service (ARS) and the University of Nebraska found a 94% reduction in direct life-cycle greenhouse emissions from switchgrass-based ethanol compared to gasoline.
  • In closing, I feel that it is important to stress that renewable fuels are one piece of the solution to transportation emissions, but not a complete solution. Renewable fuels will be ONE part of a larger strategy, but so will increased vehicle fuel efficiency, expanded public transit, and “smart growth” practices (enabling more transit, biking and walking). In addition, technologies such as E85 engine optimization and plug-in hybrids will allow us to get more out of each gallon of fuel.

Mr. Bob Dinneen - President and Chief Executive Officer, Renewable Fuels Association

  • According to a report set to be released in late February from economist John Urbanchuk of LECG, LLC, the American ethanol industry is a job creating engine.  The increase in economic activity resulting from ongoing production and construction of new ethanol capacity supported the creation of 238,541 jobs in all sectors of the economy during 2007.  These include more than 46,000 additional jobs in America’s manufacturing sector -- American jobs making ethanol from grain produced by American farmers. The 9 billion gallons of ethanol we will produce in 2008 will reduce greenhouse gas emissions by more than 14 million tons, or the equivalent of taking 2.5 million vehicles off the road (Air Improvement Resources, Inc., February 2008). Specifically, expansion of the U.S. biofuels industry will:
  • Add more than $1.7 trillion (2007 dollars) to the gross domestic product between 2008 and 2022;
  • Generate an additional $436 billion (2007 dollars) of household income for all Americans between 2008 and 2022;
    Support the creation of as many as 1.1 million new jobs in all sectors of the economy by 2002;
  • Generate $209 billion (2007 dollars) in new Federal tax receipts; and,
  • Improve America’s energy security by displacing 11.3 billion barrels of crude oil between 2008 and 2022 and reduce the outflow of dollars to foreign oil producers by $817 billion (2007 dollars) between 2008 and 2022. (Source(Economic Impact of the Energy Independence and Security Act of 2007, Renewable Fuel Standard, by John M. Urbanchuk, Director, LECG LLC January 2008).
  • A recent report by the U.S. Department of Commerce’s Bureau of Manufacturing and Services, Energy in 2020: Assessing the Economic Effects of Commercialization of Cellulosic Ethanol, noted the commercial viability of cellulosic ethanol will strengthen the competitiveness of many domestic industries and have a positive effect on the U.S. economy.  In fact, the report found that annual benefits for American consumers would total $12.6 billion if cellulosic ethanol production increased; U.S. crude oil imports would fall 4.1 percent if 20 billion gallons of cellulosic ethanol were produced in 2020, which is approximately 40 percent of current crude oil imports from Venezuela; and, the global price of oil and the domestic U.S. fuel price would be 1.2 percent and 2.0 percent, respectively, lower than projected.

Mr. Brian Jennings - Executive Vice President, American Coalition for Ethanol

"According to the National Commission on Energy Policy, the combination of the new RFS schedule and landmark corporate average fuel economy (CAFE) requirements in EISA 2007 will achieve numerous economic and environmental benefits:"

  • Reduction of transfer of wealth abroad of $73 billion per year in 2020 and $129 billion in 2030, using current prices ($90 per barrel oil, $3 per gallon gasoline)
  • Reduction in U.S. oil use of 2.8 million barrels a day by 2020, and 5 mbd by 2030.
  • U.S. consumer fuel savings of $71 billion per year in 2020, and $161 billion in 2030, using approximate current prices.
  • Reduction in U.S. CO2 emissions by 320 million metric tons in 2020, and 675 mmt in 2030.
  • Reduction in passenger vehicle emissions by 15 and 30 percent, respectively, under what they otherwise would be.
  • Reduction in 2020 of approximately 4 percent of projected total net U.S. CO2 emissions versus what they would otherwise be.

The testimony of Mr. Charles Drevna - President, National Petrochemical and Refiners Association
was very similar to the rash of anti-ethanol stories that appeared in the media during the EIAS07 debate.  The speech was also hauntingly familiar to past testimony provided by NPRA during the phasing out of leaded gasoline, the creation of the oxygenated fuel standard in carbon monoxide non-attainment areas, the reformulated gasoline program for ozone non-attainment areas, and in response to efforts by EPA to reduce the volatility and sulfur content of gasoline, and Congressional hearings during the creation of the RFS in the Energy Policy Act of 2005 and expanding the RFS in the EISA07.

Mr. Robert Meyers - Principal Deputy Assistant Administrator for Air and Radiation, U.S. Environmental Protection Agency also provided testimony for the Committee.

January 05, 2008

Happy "New Energy" Year

Consumers were greeted this New Year with a drop in their 401Ks from a stock market reacting to crude oil surpassing hitting the record $100 per barrel mark, visions of $4 per gallon gasoline – and The Energy Independence and Security Act of 2007 (EISA07).  Ring out the old [news] and bring in the new [news]!

The EISA07 was passed with the help of both mainstream political parties and was supported by the President – only after undergoing the scrutiny of hundreds of hours of public hearings, debates, and the completion of millions of dollars in private and government studies.  The law was passed in the face of roaring negative public relations pressure from many in the oil industry and other sectors that feared hardship from a law that would require a new renewable fuel standard.  Many critics of ethanol tried to dissect and piece meal the energy bill issues to drive doubt and concern into the minds of law makers and consumers.  Yet the Administration and Congress set legislation in motion that will displace nearly all of the Nation's $1 billion dollar per day imported crude oil habit by 2030.  New and developing ethanol and automotive technologies are the center pieces of this historic legislation and they will be the focus of this blog during the coming years.  We believe in total this law is progressive, fair, and was created with open dialog and honest debate.

The U.S. currently consumes about 190 billion gallons of gasoline and diesel fuel annually to meet its transportation fuel needs.  Of this volume, about 65% or 124 billion gallons is derived from foreign sources.  – U.S. Department of Energy.

While the Energy Independence and Security Act of 2007 (EISA07) did not address growing the demand for renewable electricity and a few other important energy matters, it does address the most important and volatile energy issue facing our nation – the ever growing and detrimental economic, environmental and national security costs paid by our country and its citizens by continuing to rely on crude oil as a primary source of energy for transportation.  The provisions in the EISA07 will reduce crude oil categorically, imported crude oil specifically, and gasoline use emphatically.  Gasoline will be reduced in two ways.  The increase in corporate average fuel economy (CAFE) standards will eventually reduce gasoline by about 1.1 million barrels per day in new cars and inserting 36 billion gallons per year of renewable fuels like ethanol will reduce gasoline use in all cars.  All things considered, the government hit the nail on the head and successfully addressed the priority energy issue.  A challenge that industry and consumers have not been able to resolve on their own for the past 30 years.

In the face of all the anti-ethanol articles during the past year – is the new law good news?  Yes! But if you don’t believe me read the new law (H.R.6.ENR).  The Administration and Congress addressed the apprehension of the honest debaters and the trepidation of objective researchers that were truly concerned about the sustainable development of "clean/renewable/domestic fuels" – and ignored those trying to protect the status quo market share of gasoline.  In the past year many of you have read and/or written about the thousands of anti-ethanol stories claiming the upcoming choice between food production or fuel production, negative energy balances, greenhouse gas emission increases, not enough gallons to make a difference in oil imports, the government shouldn’t pick winners, and what if things go wrong, just to name a few.  If you were one of the honestly concerned, you should be happy to see all of your concerns were addressed in the new law.

Below are a few examples of how the EISA07 created an ambitious yet cautious and fair goal for ethanol production and use.

Is 36 Billion Gallons Enough to Make a Difference?  If it is not enough to make a difference it sure is enough to make a point.

  • The U.S. imports about 17.5 BGPY of gasoline and gasoline blending components.  Maybe doubling the supply of finished transportation entering our country will drive own some gasoline prices?
  • To simplify and make a comparison, in 2006 the United States imported 33.9 billion gallons per year (BGPY) from the Persian Gulf -- the worlds’ largest proven reserves of crude oil and home of multiple and long term diplomatic conflicts (e.g., 8.4 BGPY from Iraq, 1.3 Libya BGPY, 21.7 BGPY from Venezuela just to name a few).
  • While the U.S. has already addressed Iranian crude oil imports with sanctions, when the energy security contribution of CAFE increases by automakers are added to the expanded RFS, the RFS/CAFE crude oil reductions may exceed Iran’s contribution to the world crude oil energy supply.

The Government is Not Picking Winners

  • Two subcategories have been added to the national Renewable Fuel Standard. The first is Advanced Biofuels, which is defined as any renewable fuel other than ethanol derived from corn starch that meets life cycle greenhouse gas emissions at least 50 percent less than the baseline.
  • The RFS is not limited to ethanol as it includes biomass-based diesel, biogas, butanol, and other alcohols and other fuels derived from cellulosic biomass. The new law also does not allow many of the coal-to-liquid or other petroleum-based technologies to slip in under the "renewable" definition.   It also does not stop their development.  Everyone gets a fair shot at this new clean fuels market and developing new technologies – including oil companies.

Ethanol Should Have a Positive Energy Balance and Reduce Greenhouse Gases

  • While the majority of recent studies show modern ethanol plants have a positive energy balance, the new law makes sure of it.  A second category in the RFS is called Cellulosic Biofuels is defined as a renewable fuel from cellulose reduces the life cycle greenhouse gas emission (i.e., energy use) of 60 percent less than the baseline.  The baseline will be created on a comparison to gasoline or diesel fuels sold in the year 2005.  Gasoline production does not have a positive energy balance, so the hurdle for renewable fuels will be higher than the current standard.
  • The legislation creates a new grant program for the research and production of advanced biofuels and programs as well as extra incentives to reduce fossil fuel energy consumption in ethanol plants. 

Protecting Food Supplies: Food vs. Fuel Production

  • The EISA07 caps the amount of corn that can be used for ethanol at 15 billion gallons beginning in the year 2015.  There is also considerable amount of attention paid to studying the impacts on virtually every sector of the economy, including food production and prices, as a result of complying with the new RFS legislation.
  • The EISA07 also contains several economic and environmental safeguards (e.g., RFS waivers and suspensions) should the government feel the need to reduce the RFS requirement based on their requirements to continually study the impact of increased ethanol/cellulose/renewable fuel production and use. 

Consumer Protection & Increased Market Competition

  • EISA07 prohibits major oil companies from restricting the sale of renewable fuels in gasoline retail "franchise agreements." This part of the law prohibits the restriction of installing retail renewable fuel dispensers, converting existing gasoline tanks or pumps to renewable fuel blends, advertising renewable fuels, purchasing renewable fuels from persons other than the franchiser, listing renewable fuel availability on signs or dispensers, and allowing the use of credit card payment.
  • The law also allows a franchisee (gasoline retailer) to remove one grade of gasoline, even if three are required by the franchise (major oil company) contract.  This allowance is extremely important as many new E85 distributors would need to replace either premium or mid-grade with E85.

True Alternative Fuels Not Just a Gasoline Blend

  • The law requires the Department of Energy to issue a report within 24 months on the feasibility of requiring E85 fuel dispensers in regions where Flexible Fuel Vehicles (i.e., FFVs, or vehicles that can burn up to 85 volume percent of ethanol) comprise at least 15 percent of all motor vehicles.
  • The EISA07 requires the government to perform an ethanol pipeline study and implement a number of other small programs that will address and solve retail, technical, and marketing issues relating to marketing and distribution of ethanol and E85.

Increased Production and Use of Alternative/Flexible Fuel Vehicles

  • Our government even had the foresight to extend the corporate average fuel economy credits (i.e., CAFE credits) designed to help automakers produce and sell Flexible Fuel vehicles (FFVs). This is a declining credit beginning in the year 2014 and remains in effect through 2019.  While some organizations have historically criticized "CAFE credit" for FFVs, this credit is single-handedly responsible for adding the six million FFVs that are on the road today.   As a result of those CAFE credits, U.S. automakers have already pledged to make 50% of their vehicles FFVs by 2012.  Existing and new FFVs will provide crucial support for a nation trying to meet new RFS requirements and consumers demanding relief from crude oil imports.
  • Do as I do.  The EISA07 also contains some progressive "petroleum reduction requirements" (i.e., crude oil) for federal government agencies, most of which could be met by biofuels in hundreds of fleets across the country.

On many other levels, the EISA07 sets a great example of the nation trying to meet its core mission of protecting democracy, capitalism and diplomacy.  This law is a great start to a much brighter energy future.  Our "new energy" law and ethanol specifically, has undergone and will continue to under go more scrutiny than any issue our nation has faced.  Deploying the components of the Energy Independence and Security Act of 2007 and the new Renewable Fuel Standard may not be easy, but it should easily be considered a very proud moment for our country.  We all need to play a role in making sure it meets all of our expectations. The public demanded change, Congress created the vehicle for change, and the President signed change into law.  The majority of people in this country will benefit from a very important public battle that was won over the nation’s future energy policy. Game – Set – Match, let’s move forward.

The Energy Independence and Security Act of 2007 Renewable Fuel Standard
(Billion Gallons Per Year)

Year Total Volume of Renewable Fuels Advanced Biofuel Requirement Cellulosic Requirement (Resulting Cap on Corn Ethanol)
2008 9.000      
2009 11.100 .600   10.5
2010 12.950 .950 .100 12.0
2011 13.950 1.350 .250 12.6
2012 15.200 2.000 .500 13.2
2013 16.550 2.750 1.000 13.8
2014 18.150 3.750 1.750 14.4
2015 20.500 5.500 3.000 15.0
2016 22.250 7.250 4.250 15.0
2017 24.000 9.000 5.500 15.0
2018 26.000 11.000 7.000 15.0
2019 28.000 13.000 8.500 15.0
2020 30.000 15.000 10.500 15.0
2021 33.000 18.000 13.500 15.0
2022 36.000 21.000 16.000 15.0

There is also the first ever renewable diesel requirement under the following schedule:

Year 2009 2019 2011 2012
Amount (BGPY) .5 .65 .80 1.0

Happy "New Energy" Year! Do you have any energy related resolutions?

Burl Haigwood
Director of Program Development