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Lecture 11:Tr anspor tation, Petroleum Use,        and Alter natives            Guest Lecture: Anthony Eggert             ...
Lecture Outline• Recap and completion of petroleum slides  – 10 facts about transportation and oil use  – Summary of key i...
11 Facts of Oil                       (recap of earlier lecture)1.    Transportation uses over 1/4 of all energy in the U....
Snapshot of US Petroleum Use• Transportation consumes 28% of U.S. energy• Transportation is 93% fueled by oil in the U.S• ...
Problems of Petroleum Dependence•   Economic     –   We depend on a resource for which our domestic supply is limited     ...
Pres. Bush’s 2006 State of the Union“America is addicted to oil … The best way to break this addiction is through technolo...
Energy Independence?http://www.thedailyshow.com/watch/wed-june-16-2010/an-energy-independent-future
Source: Greene, “Low Carbon Transportation”, ARB Chairs Lecture, 2012
The Real ProblemSource: Greene, “Low Carbon Transportation”, ARB Chairs Lecture, 2012
What does oil dependence cost?1. Loss of potential GDP = producers’ & consumers’   surplus losses in oil markets (dynamic)...
On Alternatives to Oil…“ The Stone Age did not end for  lack of stone, and the Oil Age will  end long before the world run...
W hich vehicle/fuel alter native willwin?  Electric?     Hybrid/PHEV?       Biofuel?                Nat. Gas /  Fuel Cell?...
“Ener g y Car rier” ADHD*• 30 year s ago – Synfuels (oil shale,  coal)• 25 year s ago – Methanol• 18 year s ago – Electric...
Many Possible Policy Approachesand Many Possible Low Carbon Fuels          14
Alternative Fuels and Vehicles          There are many complex paths by which we can get diverse          primary energy s...
Alternative Fuels and Vehicles          There are many complex paths by which we can get diverse          primary energy s...
Many Ways of Producing Biofuels - production pathways
Many ways of producing hydrogen (and electricity)                              Nuclear                                    ...
Vehicles to Utilize Alternative fuels         Volkswagen Jetta              (Diesel)                               Tesla R...
Evaluation Criteria•   Costs•   Safety•   Local pollution•   GHGs•   Performance•   “Utility”•   Availability of energy di...
Fuel Considerations                      (performance and utility)                                Properties of fuels and ...
Estimated Gasoline-Equivalent Costs of Alternative                  Liquid Fuels                                          ...
Cost of alternatives (fuels/vehicle)                       Source: USDOE, 2011
InfrastructureNumber of fueling stations in the U.S., 2012                                                             • P...
Diesel Vehicles•   Current status:           Fuel widely available                           Limited light-duty vehicle op...
CNG Vehicles•   Current status:           Natural gas is widely available (but not as CNG)                           Very ...
Ethanol Vehicles  •   Current status:            Widely available – all vehicles are E10-capable                          ...
Biodiesel Vehicles•   Current status:            Limited by low numbers of diesel vehicles (~10 models)                   ...
Plug-In Hybrid Vehicles•   Current status:            Chevy Volt first ‘large production’ plug-in hybrid ( approx   1,000/...
Electric Vehicles•   Current status:             Here in small numbers: neighborhood vehicles                            N...
Hydrogen Fuel Cell Vehicles    Hydrogen: an energy carrier that can be derived from many sources    Fuel cell: an electroc...
H2 Fuel Cell Vehicles•   Current status:            Prototype/Demonstration phase: (100s of vehicles being tested)        ...
Evaluation Criteria• Costs• Safety• Local pollution• GHGs (life cycle)• Performance• “Utility”• Availability of energy dis...
Miscellaneous• My office hours (esp concerning  paper #2)  – Today 3:15-4:30  – TH 3:15-4:45• Paper #2 due next tues• Gues...
Fuel Lifecycle – Gasoline                                                     73 g/MJ   7                      14 g/MJ g/M...
Fuel Lifecycle – Corn Ethanol                                                                   Emissions   36            ...
Biofuel Impacts                                               • What are the processes that created        Corn           ...
GHG Emissions of Alt FuelsVarious advanced vehicle technologies have the potential toreduce life-cycle vehicle GHG emissio...
Major Alternative Fuel Policies in US•   American Recovery and Reinvestment Act of 2009    –   Supported alternative fuels...
Many Possible Policy Approaches    and Many Possible Low Carbon Fuels•    Volumetric mandates     – e.g. US Renewable Fuel...
RFS (national)• Energy Independence and Security Act of 2007  mandates the use of 35 billion gallon of biofuels in  U.S. t...
RFS Details [new slide]• Imposed on oil companies• Only targets biofuels• GHG emissions of corn etoh must be 20+% better  ...
What is LCFS   Performance based: GHG intensity target for   transport fuels E × CI       n                 ∑        Total...
California LCFS Program  Adopted April 2009, took effect Jan 2010  Applies to on-road transport fuels     Excludes air and...
LCFS is Spreading (updated)  EU moving toward an LCFS; its “Fuel Quality Directive” is very  similar to California LCFS (a...
Key Challenges of an Expanded LCFS 1) Indirect land use change 2) Leakage and shuffling 3) Energy security 4) Environmenta...
Challenge 1. Indirect Land Use Change  When lands with rich soil and biomass carbon deposits are  initially converted to a...
Magnitude of ILUC                                 (initial CARB Estimates)        100                                     ...
Issues with iLUC   How to handle this scientific uncertainty?? If we ignore it,   we are assigning a value of zero, which ...
Challenge 2. Leakage and Shuffling   Concern: Regulated parties export high-carbon fuels to non-   LCFS countries     Cana...
Challenge 3. Energy Security    LCFS responds to climate goals (by reducing GHGs), but more    mixed effect on energy secu...
Challenge 4. “Sustainability” of FuelsMany environmental and social impacts:  Food vs fuel: increased demand for SOME biof...
Integration with National RFS?    40              National Renewable Fuel Standard Requirement                   96    35 ...
My piggy bank after I bought gasoline this morning...
LCFS SummaryLCFS appears to be most effective policy for orchestratingtransition to low carbon fuels   Includes all fuels ...
Conclusions•   Many associated problems with the prevailing petroleum-    based transportation system:     –   Economic co...
Extra slides
Dif ficulty of Transitioning to most     pr omising alter native fuels           Sperling and Gordon, 2009                ...
Proved ReservesSource: Greene, “Low Carbon Transportation”, ARB Chairs Lecture, 2012
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  1. 1. Lecture 11:Tr anspor tation, Petroleum Use, and Alter natives Guest Lecture: Anthony Eggert Prof. Dan Sperling November 13, 2012 Fall Quarter 2012 Energy and Environmental Aspects of Transportation Civil and Environmental Engineering (ECI) 163 Environmental Science and Policy (ESP) 163
  2. 2. Lecture Outline• Recap and completion of petroleum slides – 10 facts about transportation and oil use – Summary of key issues• Alternative fuels in transportation – Fuel, vehicle characteristics – Available alternatives to petroleum – Impacts on emissions, energy – Policy strategies
  3. 3. 11 Facts of Oil (recap of earlier lecture)1. Transportation uses over 1/4 of all energy in the U.S.2. Transportation uses over half of the world’s oil production3. Transportation depends almost exclusively on petroleum4. U.S. domestic oil production has declined and imports have increased5. World vehicle population (and therefore oil use) is increasing at a rapid rate6. World oil price is expected to “peak” “soon”7. Most of world oil is owned by gov’t-controlled oil companies (~80%)8. The world is NOT running out of hydrocarbon energy9. Unconventional Oil Has Large(r) Environmental Costs including carbon and other emissions (externalities)10. Oil resources unevenly distributed11. Demand is inelastic and prices are erratic
  4. 4. Snapshot of US Petroleum Use• Transportation consumes 28% of U.S. energy• Transportation is 93% fueled by oil in the U.S• Transportation uses 67% of U.S. oil• U.S. oil consumption is 18.8 million barrels/day (~22% of world consumption)• U.S. oil consumption is 55% imported (declining)  So what’s the problem?Sources: Davis, Diegel, Boundy (2012). Transportation Energy Data Book: Edition 31. USEIA (March 2012). Monthly EnergyReview
  5. 5. Problems of Petroleum Dependence• Economic – We depend on a resource for which our domestic supply is limited – Transfer of wealth ($200-400 bill/yr) from U.S. to foreign countries – Oil price shocks have wider impacts on the economy – Estimated cost to US economy is $2Trillion from 2005-2010 (Greene)• Geopolitics – Most world petroleum is held by government-controlled oil companies (~80%) – Many oil-producing countries can be politically unstable, undemocratic – Some are using petro-dollars for politically disruptive purposes (especially in Venezuela, Iran) – Military expenditures for defending oil supplies – High oil costs are especially disruptive to poorer countries• Environmental – Environmental externalities from petroleum combustion including local pollution and climate change – Unconventional oil options produce higher CO2 emissions and have other large environmental costs Near exclusive dependence on oil means transition to alternatives is likely to be challenging
  6. 6. Pres. Bush’s 2006 State of the Union“America is addicted to oil … The best way to break this addiction is through technology ... We must … change how we power our automobiles. We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. Well also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks, or switch grass.” (Applause.)
  7. 7. Energy Independence?http://www.thedailyshow.com/watch/wed-june-16-2010/an-energy-independent-future
  8. 8. Source: Greene, “Low Carbon Transportation”, ARB Chairs Lecture, 2012
  9. 9. The Real ProblemSource: Greene, “Low Carbon Transportation”, ARB Chairs Lecture, 2012
  10. 10. What does oil dependence cost?1. Loss of potential GDP = producers’ & consumers’ surplus losses in oil markets (dynamic).2. Dislocation losses of GDP due to oil price shocks.3. Transfer of wealth due to monopoly pricing and price shocks (requires counterfactual competitive price). Estimate - $2Trillion from 2005-2012 Source: Greene, “Low Carbon Transportation”, ARB Chairs Lecture, 2012
  11. 11. On Alternatives to Oil…“ The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil” – Sheikh Zaki Yamani 1970s and ’80s Saudi Arabian oil minister
  12. 12. W hich vehicle/fuel alter native willwin? Electric? Hybrid/PHEV? Biofuel? Nat. Gas / Fuel Cell? Bio-methane? Other?
  13. 13. “Ener g y Car rier” ADHD*• 30 year s ago – Synfuels (oil shale, coal)• 25 year s ago – Methanol• 18 year s ago – Electricity (Batter y EVs)• 8 year s ago – Hydrogen (Fuel cells)• 4 year s ago – Ethanol/Biofuels• Today – Electricity again (EV+PHEV )• Next year ?*Attention deficit hyperactivity disorder (ADHD): ADHD is a problem withinattentiveness, over-activity, impulsivity, or a combination of these. (Source:US National Library for Medicine)
  14. 14. Many Possible Policy Approachesand Many Possible Low Carbon Fuels 14
  15. 15. Alternative Fuels and Vehicles There are many complex paths by which we can get diverse primary energy sources on-board our vehicles. Energy carriers, fuels for Vehicle Technologies transportationPrimary energy Gasoline combustion Coal-to-liquid sources Diesel combustion GasolineCoal Hybrid gasoline-electric DieselPetroleum Flex-fuel ethanol-gasoline Liquefied petroleum gas (LPG)Natural gas Flex-fuel biodiesel-diesel Compressed natural gas (CNG)Solar Plug-in hybrid electric Liquefied natural gas (LNG)Wind LPG/LNG ElectricityGeothermal CNG HydrogenNuclear Electric EthanolAgricultural crops Hydrogen combustion BiodieselWaste Hydrogen fuel cell Biobutanol
  16. 16. Alternative Fuels and Vehicles There are many complex paths by which we can get diverse primary energy sources on-board our vehicles. Energy carriers, fuels for Vehicle Technologies transportationPrimary energy Gasoline combustion Coal-to-liquid sources Diesel combustion GasolineCoal Fossil-based fuels Hybrid gasoline-electric DieselPetroleum Flex-fuel ethanol-gasoline Liquefied petroleum gas (LPG)Natural gas Flex-fuel biodiesel-diesel Compressed natural gas (CNG)Solar Plug-in hybrid electric Liquefied natural gas (LNG)Wind LPG/LNG ElectricityGeothermal CNG HydrogenNuclear Electric EthanolAgricultural crops Hydrogen combustion BiodieselWaste Hydrogen fuel cell Biofuels Biobutanol Versatile energy carriers
  17. 17. Many Ways of Producing Biofuels - production pathways
  18. 18. Many ways of producing hydrogen (and electricity) Nuclear Coal Methanol Farm Wind Coal Ethanol Solar Gasification Electrolysis Fossil Fuel of water ReformationFossil Fuels H Y D R O GEN Tar Sands Natural Gas Steam BioHydrogen Reformation Biomass G asification Fossil Landfills Fuels Algae Leafy Plants Wood Chips Agricultural Waste Source: Sperling and Gordon, 2009
  19. 19. Vehicles to Utilize Alternative fuels Volkswagen Jetta (Diesel) Tesla Roadster Toyota PriusGM’s Volt (Plug-in Hybrid) (electric) (Hybrid gas-electric, plug-in) Honda Civic GX CNG Honda FCX Clarity BMW Hydrogen 7 (hydrogen fuel cell)
  20. 20. Evaluation Criteria• Costs• Safety• Local pollution• GHGs• Performance• “Utility”• Availability of energy distribution infrastructure• Energy supply
  21. 21. Fuel Considerations (performance and utility) Properties of fuels and energy carriers Mass Volume energy energy State Fuel or energy carrier density density (at STP)• Critical alternative (MJ/kg) (MJ/L) fuel considerations Gasoline 46 34 Liquid – Chemical, physical, Diesel 46 37 Liquid and energy characteristics Ethanol 30 24 Liquid – Refueling time E85 33 26 Liquid – Availability of Biodiesel 42 33 Liquid inexpensive primary Natural gas (3600 psi) 50 10 Gas energy sources LPG propane 50 25 Liquid Hydrogen (5000 psi) 143 5.6 Gas Electric (PB-acid) 0.09-0.11 0.14-0.17 Solid Electric (NiMH) 0.22 0.36 Solid Electric (Lithium-ion) 0.54-0.72 0.9-1.9 Solid
  22. 22. Estimated Gasoline-Equivalent Costs of Alternative Liquid Fuels 2-14
  23. 23. Cost of alternatives (fuels/vehicle) Source: USDOE, 2011
  24. 24. InfrastructureNumber of fueling stations in the U.S., 2012 • Potential Fuel or energy carrier Stations infrastructure issues: – Primary resourceGasoline ~121,446 locationLiquefied petroleum gas (LPG) 2,652 – Fuel propertiesEthanol (E85) 2,544 – Distribution system: pipeline, freight, etcCompressed natural gas (CNG) 1,091 – Refueling stationsBiodiesel (B20 or greater) 679Electricity 12,761 • Minimize problemsHydrogen 58 with city-by-city approachLiquefied natural gas (LNG) 58 Sources: US DOE, updated 08/25/2012.http://www.afdc.energy.gov/afdc/fuels/stations_counts.html US Census (2012).
  25. 25. Diesel Vehicles• Current status: Fuel widely available Limited light-duty vehicle options ~10 models Volkswagen, BMW, Jeep, Mercedes• Requirements – Fuel: Widely available Volkswagen Jetta – Vehicle: Compression ignition engine, exhaust treatment• Costs – Fuel: Approximately same as gasoline – Vehicle: Can be expensive: $1000 to $4000 more per vehicle• Issues/bonuses: Getting diesel emissions as low as gasoline Better performance• Energy impacts: 15-30% energy/petrol reduction due to efficiency• Air Quality impacts: Can be even with gasoline (with mor e expensive exhaust tr eatment)• GHG impact: 15-30% reduction Mercedes-Benz BLUETEC
  26. 26. CNG Vehicles• Current status: Natural gas is widely available (but not as CNG) Very limited light-duty vehicle options (1 model) Honda Civic GX NGV• Requirements – Fuel: Must be in pressurized (3600 psi) form – Vehicle: Fuel storage tank, engine, fuel system Honda Civic GX NGV• Costs – Fuel: Natural gas is ~50% cheaper per energy unit – Vehicle: Can be expensive: $5,000+ more per vehicle• Issues/bonuses: Cleaner: Lower emission control cost• Energy impacts: ~100% reduction in petroleum use Roughly same energy use as conventional vehicle• Air Quality impacts: 60-90% reductions of NOx, HC, CO, PM (for trucks)• GHG impact: 20-25% reduction Methane (a GHG…) leakage is an issue
  27. 27. Ethanol Vehicles • Current status: Widely available – all vehicles are E10-capable Millions of “flex-fuel” vehicle are E85-capable 10% of U.S. motor vehicle fuel in 2012* • Requirements – Fuel: Cheap agricultural feedstock (like corn) – Vehicle: Up to E10 – none; E85 - minor modifications • Costs – Fuel: Can be cheaper than gasoline (depending on world oil price) – Vehicle: E10 - free; E85 - minor (<$400/vehicle) • Issues: Sources: Cellulosic, “Advanced,” “Second Generation” biofuels Indirect impacts: land use effect due to cropland expansion • Energy impacts: Reductions in overall energy use: 10-20% reduction per gallon displaced (corn-derived) 50-80% reduction per gallon displaced (sugarcane-derived) 70-90% reduction per gallon displaced (cellulosic/waste-derived) • Air Quality impacts: Modest HC, NMOG, NOx reductions • GHG impact: 10-20% reduction to 100%+ increase (corn-derived) 70-90% reduction to 50%+ increase (cellulosic/waste-derived)*Source: Renewable Fuels Association (2012). Accelerating Industry Innovation – 2012 Ethanol Industry Outlook.
  28. 28. Biodiesel Vehicles• Current status: Limited by low numbers of diesel vehicles (~10 models) All diesel vehicles are B20-capable Total biodiesel production is <500 million gallon/yr Straight vegetable oil (SVO) requires vehicle modifications• Requirements – Fuel: Cheap agricultural feedstock (waste oils, virgin oils (soy)) – Vehicle: Up to B20 – none; E85 - minor modifications• Costs – Fuel: Can be cheaper than diesel (depending on world oil price) Volkswagen (Diesel, B20-capable) – Vehicle: B20 - free; >B20 - minor modifications; SVO• Issues: Sources: Crop- vs. Waste-derived (greases, animal fats) Indirect impacts: land use effect due to cropland expansion• Energy impacts: 50-80% reduction in energy use per gallon diesel displaced• Air Quality impacts: Modest HC, NMOG, PM reductions; mixed NOx results• GHG impact: 50-80% reduction to 100%+ increase with land use effects
  29. 29. Plug-In Hybrid Vehicles• Current status: Chevy Volt first ‘large production’ plug-in hybrid ( approx 1,000/month) Toyota Prius plus introduce in March 2012 Others coming in 2012/2013• Requirements – Fuel: Recharging stations (home, work, other) Toyota Prius (retrofit plug-in hybrid) – Vehicle: Energy-dense inexpensive battery pack (Lithium Ion?)• Costs – Fuel: Electricity is cheaper (>50%) per energy unit than petroleum – Vehicle: Incremental cost $5,000 to $10,000 per vehicle (?)• Issues: How many miles will be on grid electricity? Where does electricity come from? Battery technology (Lithium-Ion?) and cost GM Volt (PHEV40, 2010)• Energy impacts: ~20-40% reduction (if never uses grid electricity) ~35-60% reduction (if commonly uses grid electricity)• Air Quality impacts: Small reduction (if never use grid electricity) Major reductions in local (on-vehicle) emissions Saturn Vue (PHEV10, 2010)• GHG impact: 20-60% reduction (depending on use of grid electricity)
  30. 30. Electric Vehicles• Current status: Here in small numbers: neighborhood vehicles Nissan Leaf first large production vehicles (~1,000/month).   Other small volume production include (for example): Tesla Roadster, Model S; Fisker; ToyotaRav4, Honda Fit EV, Ford Focus EV• Requirements – Fuel: Recharging stations (home, work, other) – Vehicle: Energy-dense, inexpensive battery pack (Lithium Ion?) Tesla Roadster• Costs (2008/9) – Fuel: Electricity is cheaper (>80%) per energy unit than petroleum – Vehicle: Premium of greater than $10,000 per full-size vehicle… Smaller neighborhood vehicles (~$10k GEM)• Issues: Where does electricity come from? Battery technology (Lithium-Ion?) and cost Refueling time of several hours Smart EV (2010)• Energy impacts: Vehicles far more efficient (~75% vs. ~20%) 100% petroleum reduction ~30-60% overall energy reduction (depends on elec. sources…)• Air Quality impacts: ~Zero local (on-vehicle) emissions Can offer major reductions in overall emissions GEM (2008)• GHG impact: ~30-60% reduction (depending on energy sources)
  31. 31. Hydrogen Fuel Cell Vehicles Hydrogen: an energy carrier that can be derived from many sources Fuel cell: an electrochemical device which converts chemical energy to useful electrical work Fuel cell (PEM) Hydrogen fuel cell vehicle Source: Dana CorporationH2 + O2  H2O + Fuel cell stack CompressedEnergy hydrogen storage
  32. 32. H2 Fuel Cell Vehicles• Current status: Prototype/Demonstration phase: (100s of vehicles being tested) Vehicles in showrooms 2014-2016 including from Toyota, Hyundai, Daimler, GM Assuming adequate infrastructure exists ~60 hydrogen (H2) stations in the U.S.• Requirements – Fuel: Strategic infrastructure development – Vehicle: Inexpensive fuel cell stack, hydrogen storage Honda FCX Clarity (hydrogen fuel cell)• Costs – Fuel: Can be cheaper than gasoline (only at high world oil price) – Vehicle: Very high for current small volume ($10k/month for UCD lease!)• Issues: Where hydrogen comes (it is a versatile energy carrier) Fuel cell vehicle costs (platinum, hydrogen storage)• Energy impacts: ~0% reduction (coal as energy source) ~50% reduction (distributed natural gas-reformation) ~90% reduction (renewable primary energy source)• Air Quality impacts: ~Zero local (on-vehicle) emissions Major reductions in overall emissions (if coal not energy source)• GHG impact: 50-90% reduction (depending on energy source)
  33. 33. Evaluation Criteria• Costs• Safety• Local pollution• GHGs (life cycle)• Performance• “Utility”• Availability of energy distribution infrastructure• Energy supply
  34. 34. Miscellaneous• My office hours (esp concerning paper #2) – Today 3:15-4:30 – TH 3:15-4:45• Paper #2 due next tues• Guest speakers TH (NRDC and oil company)
  35. 35. Fuel Lifecycle – Gasoline 73 g/MJ 7 14 g/MJ g/MJ 1 1 g/MJ g/MJOil Well Refinery Vehicle Transportat Transportat ion ion Gasoline 96 gCO2- eq/MJ
  36. 36. Fuel Lifecycle – Corn Ethanol Emissions 36 38 are g/MJ g/MJ Offset 2 3Corn Field g/MJ Bio-Refinery g/MJ Vehicles Transportation Transportat ion Blend with gasoline 30 g/MJ -12 g/MJLand Use Corn Ethanol Change 65-105 gCO2-eq/MJ Co-products
  37. 37. Biofuel Impacts • What are the processes that created Corn the biofuel?  Clear land for farming  Harvest, mill crop  Ferment, distillationSugarcane  Transport• Alternative fuels must be assessed on a life-cycle basis: – Systems approach – Upstream emissions – Upstream energy – Varying results, depending on feedstock and process… Source: Based on Wang (2007), GREET
  38. 38. GHG Emissions of Alt FuelsVarious advanced vehicle technologies have the potential toreduce life-cycle vehicle GHG emission by 23-66% by 2030. Vehicle cycle Fuel upstream Vehicle energy useLife-cycle greenhouse gas emissions (g CO2/km) 23% 26% 29% 300 41% 41% 43% 66% 200 100 0 e e l) l id c ) p) se ue lin lin tri no br ro e ec so id so hy ha Di ,c es el ga ga et s ic -in s- ,r nt n nt ga ug lo sic or rre ie lu Pl (c id lo f ic el Cu br lu 5* (c Ef el Hy E8 5* (c E8 5 E8 Vehicle technology Source: Adapted from Bandivadekar et al, 2007.
  39. 39. Major Alternative Fuel Policies in US• American Recovery and Reinvestment Act of 2009 – Supported alternative fuels and vehicle technologies (grants, tax credits, research and development, fleet funding, etc)• Renewable Fuel Standard (Energy Independence and Security Act of 2007) – Blending subsidies: Ethanol $0.51/gal, Biodiesel $0.50-1.00/gal. – Mandate for 35 billion gallon of biofuels in transportation fuels by 2022• Vehicle purchasing – Tax deductions for EVs and PHEVs• State and local programs – Biofuel mandates in many U.S. states (E10, B2, B5) – California’s Zero Emission Vehicle mandate (electric vehicles, hydrogen fuel cells, plug-in hybrids) – California’s Low-Carbon Fuel Standard
  40. 40. Many Possible Policy Approaches and Many Possible Low Carbon Fuels• Volumetric mandates – e.g. US Renewable Fuel Standard• Fuel subsidies – eg, corn ethanol and biodiesel• Market instruments – carbon taxes or cap and trade• Low carbon fuel standard 40
  41. 41. RFS (national)• Energy Independence and Security Act of 2007 mandates the use of 35 billion gallon of biofuels in U.S. transportation fuels by 2022
  42. 42. RFS Details [new slide]• Imposed on oil companies• Only targets biofuels• GHG emissions of corn etoh must be 20+% better than gasoline (including ILUC, but only for “new” plants)• GHG emissions of cellulosic must be 50+% better than gasoline• EPA can give waivers for cellulosic fuels if they are not available (and have done so)
  43. 43. What is LCFS Performance based: GHG intensity target for transport fuels E × CI n ∑ Total GHG emission i i AFCI ( gCO2 - eq/MJ ) = n i ∑ E × EER i i i Total transportation fuels produced/displaced Lifecycle measurement for “carbon intensity” Regulated parties are transport energy suppliers (oil providers, plus others who want to earn credits, such as biofuel, electricity, NG and H2 providers) All transport fuels are included Harnesses market forces: Allows trading of credits among fuel suppliers, which stimulates investment and continuing innovation in low-carbon fuels 43
  44. 44. California LCFS Program Adopted April 2009, took effect Jan 2010 Applies to on-road transport fuels Excludes air and maritime (where California has limited authority) Separate targets for gasoline and diesel (10% reduction for each) Allows trading between these two targets Default measurements and opt-in procedure for each activity in energy chain Encourages further innovation and investment in low-carbon practices Refinements still in progress Rules on “sustainability” Lifecycle calculations for additional energy paths 44
  45. 45. LCFS is Spreading (updated) EU moving toward an LCFS; its “Fuel Quality Directive” is very similar to California LCFS (amended Dec 2008) 11 northeastern and mid-Atlantic states signed a MOU in January 2009 committing to cooperate in developing a regional LCFS Early version of Waxman-Markey climate bill contained an LCFS One proposal for combining LCFS and RFS 0% target until 2022 for LCFS: Would operate parallel to RFS until 2022 If fully implemented, RFS would reduce GHG intensity by 4.6% in 2022 In 2023, LCFS and RFS rolled together, with 5% GHG-intensity reduction target In 2030, target would increase to 10% 45
  46. 46. Key Challenges of an Expanded LCFS 1) Indirect land use change 2) Leakage and shuffling 3) Energy security 4) Environmental and social sustainability 46
  47. 47. Challenge 1. Indirect Land Use Change When lands with rich soil and biomass carbon deposits are initially converted to agricultural production, a large amount of carbon is emitted. Massive consumption of biofuels in the U.S. leads to expansion of cultivated land area in and outside of the US (to replace diverted ag production) These iLUC effects cannot be directly observed or easily measured 47
  48. 48. Magnitude of ILUC (initial CARB Estimates) 100 Direct GHG emission Indirect GHG emission 90 80 10% below the current average fuel GHG intensity 70 60 50 40 30 20 M 10 O C g J 2 e ( ) / 0 - l -C w o o cn r B -m n h S o ea n b y o a e t o u -c e s n g u e c a i l -s r -cv n o a e W l i t n o i c r v d g vV D U e a e a s L r rbudnh S i t moayrce G Ns Ctjf ) (li g n o e f r ) ( i G R C F n o e a s E ) ( i l o n h E a h o n a l t l t C E E H o n h n o y a a c e u n g o d y f r a e l t i t l s w U r l t d u o E e a s o n h f r a i t l l t m G N C u d p o a e s r l tError bars represent range of direct lifecycle emissions using different technologies,feedstocks, and energy sources. Uncertainty of iLUC emissions are not shown, but aremuch larger than uncertainties of direct emissions. 48
  49. 49. Issues with iLUC How to handle this scientific uncertainty?? If we ignore it, we are assigning a value of zero, which we know is incorrect. Controversial because this is first time a carbon value has been assigned to land use changes Next: beef and agriculture?? Corn ethanol interests are opposed to iLUC because it makes corn ethanol less attractive. Scientific uncertainty gives opponents (such as oil refiners) an excuse to oppose it (for reasons other than self interest) Better ways to handle iLUC?
  50. 50. Challenge 2. Leakage and Shuffling Concern: Regulated parties export high-carbon fuels to non- LCFS countries Canada exports oil sands to China instead of using in US/Canada Iowa sends high-carbon ethanol to Canada Thus, no net benefit?Questions for discussion: How likely are these concerns to occur? What are the magnitude of the impacts? What if carbon policies are implemented in EU and Canada? Is concern for leakage and shuffling a legitimate reason for doing nothing? 50
  51. 51. Challenge 3. Energy Security LCFS responds to climate goals (by reducing GHGs), but more mixed effect on energy security Encourages use of alt fuels and thus increases energy security But also discourages production of fuels from oil sands, heavy oil, oil shale, and coal How to adjust LCFS to be responsive to energy security? Reduce target Other?Note 1: LCFS does not ban oil sands (which has ~15% higher GHGs on lifecyclebasis than gasoline from oil).Note 2: LCFS encourages more efficient production of oil sands, and use of lowercarbon process energy (nuclear energy? CCS?) 51
  52. 52. Challenge 4. “Sustainability” of FuelsMany environmental and social impacts: Food vs fuel: increased demand for SOME biofuels puts pressure on food prices Water: many fuel processes use large amounts of water Encourages use of land including forests and “degraded lands”? Encourages deforestation, harms indigenous people (in Asia, Brazil)Many (especially the EU, NGOs, and industry groups) are workingon “sustainability standards”1/12/2009 52
  53. 53. Integration with National RFS? 40 National Renewable Fuel Standard Requirement 96 35 95 30 94 25 M 2e J ) / 20 93 15GBno 92sa Oli C A g F ( I 10 91 Equivalent to LCFS target of 5 5% reduction by 2022 0 90 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Conventional biofuel Cellulosic biofuel Biomass based biodiesel Other advanced biofuel AFCI Phase out RFS and replace with LCFS (as proposed in early Waxman-Markey bill), but do it sooner than 2023 Convert assigned GHG requirements for each RFS fuel category into LCFS format 53
  54. 54. My piggy bank after I bought gasoline this morning...
  55. 55. LCFS SummaryLCFS appears to be most effective policy for orchestratingtransition to low carbon fuels Includes all fuels and is fuel neutral Performance standard Relies on market forces Durable framework for reducing long-term GHG emissions for transportTransforming US RFS into a federal LCFS would provideadditional flexibility and incentives for innovationLCFS adopted in California before opposing political interestswere fully marshalledPolitical opposition is strong discomfort with iLUC (and makes it more difficult to meet targets) some conflicts with energy security, corn ethanol companies and oil refiners don’t like it Enviros concerned about “sustainability” impacts 55
  56. 56. Conclusions• Many associated problems with the prevailing petroleum- based transportation system: – Economic costs – Environmental costs• Alternative fuel vehicle technologies offer… – Promising solutions in terms of reductions in air quality emissions, greenhouse emissions, petroleum use, overall energy use – Trade-offs in vehicle and fuel attributes (vehicle cost, fuel cost, vehicle performance, consumer acceptability, resource availability, driving range, refueling station availability)• Policies to orchestrate the transition are controversial. LCFS is best policy option?It won’t be easy!!
  57. 57. Extra slides
  58. 58. Dif ficulty of Transitioning to most pr omising alter native fuels Sperling and Gordon, 2009 58
  59. 59. Proved ReservesSource: Greene, “Low Carbon Transportation”, ARB Chairs Lecture, 2012

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