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House Sends Energy Bill to President Bush; New Renewable Fuel Standard

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The new Renewable Fuel Standard in the energy bill calls for a rapid acceleration in the production of cellulosic biofuels (red), and a capping of corn ethanol at 15 billion gallons per year. Click to enlarge.

By a 314 to 100 vote, the US House of Representatives passed the energy bill (H.R.6) that had come back from the Senate, thereby sending the package of programs to the White House. President Bush has indicated that he will sign the bill into law before the end of the year.

In addition to raising CAFE standards to an average 35 mpg by 2020 (earlier post), the bill also contains some provisions that provide a major increase in the Renewable Fuel Standard (RFS); the electrification of transportation; improved standards for appliances and lighting; energy savings in buildings and industry; energy savings in government and public institutions; support for research into solar, geothermal, marine and hydrokinetic energy technologies, and energy storage for transportation and electric power; research, development and demonstration of carbon capture and sequestration; the modernization of the electric grid; and a variety of other initiatives.

Newrfs2
The components of the RFS. Click to enlarge.

Renewable Fuel Standard. The bill deals with four primary categories of renewable fuel: conventional biofuel—ethanol produced from corn starch; cellulosic biofuels; biomass-based diesel (which includes biodiesel—fatty acid methyl esters); and other advanced biofuels.

Under the bill, the RFS increases to 36 billion gallons by 2022. Of that, corn ethanol production is capped at 15 billion gallons per year starting in 2015; the remainder is expected provided by “advanced biofuels”, the majority of which are cellulosic biofuels. In the final year of the standard (2022), cellulosic biofuels contribute more (16 billion gallons) than does corn ethanol (15 billion gallons).

The bill assigns minimum lifecycle greenhouse gas improvements, measured against a baseline of the lifecycle emissions from gasoline or diesel (whichever is being replaced) on sale in 2005. The minimum GHG improvement is 20%; biomass-based diesel must deliver a 50% GHG improvement, and cellulosic biofuels must deliver a 60% improvement in lifecycle GHG emissions.

The bill defines “Advanced Biofuels” as renewable fuel, other than ethanol derived from corn starch, including:

  • Ethanol produced from cellulose, hemicelluloses, and lignin;

  • Ethanol derived from sugar other than from corn starch;

  • Ethanol derived from waste materials, including crop residue;

  • Butanol or other alcohols produced via conversion of organic materials;

  • Biomass-based diesel;

  • Biogas (including landfill gas and sewage waste treatment gas) produced through the conversion of organic matter from renewable biomass; and

  • Other fuels derived from cellulosic biomass.

The RFS provides significant allowances for adjustments and revisions based on determination of the Administrator of the EPA. For example, the Administrator can reduce the percentage reductions in greenhouse gas emissions specified in the bill by up to 10 percentage points for each category if he or she determines that the reduction is not commercially feasible.

As another example, if the production of cellulosic biofuel is projected to be less than that required by the RFS, the Administrator can reduce the applicable volume in the standard.

The bill requires the DOE, USDA, and EPA to engage the National Academy of Sciences to conduct a study to assess the impact of the RFS on feed grains; livestock; food; forest products; and energy.

It also requires DOE, DOT and EPA to study the optimization of flexible fuel vehicles to determine what fuel efficiencies could exist when operating on E85. The bill also requires a study on the effects of different levels of biodiesel blends (B5, B10, B20, B30 and B100) on engine and engine systems performance and durability.

Should ASTM no have established a standard for B20 biodiesel within a year following the enactment of the bill, the Administrator of the EPA is tasked to initiate a rulemaking to establish a uniform per gallon fuel standard for such a fuel.

The bill authorizes the appropriation of $500 million for the period of fiscal years 2008 through 2015 for grants to encourage the production of advanced biofuels. A project much achieve at least an 80% reduction in lifecycle greenhouse gas emissions to be eligible for such a grant.

The bill also requires a report to Congress on any research and development challenges inherent in increasing the biodiesel and biogas components of the fuel pool in the US. Another required report will update Congress on the status of the R&D on the use of algae as a feedstock for biofuels.

Other aspects of the bill touch on the development of a biofuel refueling infrastructure, an ethanol pipeline feasibility study, and transportation of renewable fuel via railroad and other modes of transportation.

Comments

Lad

From what is discussed in this article, I see in this bill the continued control of energy by the current distributors and owners of the fuel dispensing equipment; those are the oil and gas companies and now, the major farm companies. The lobbying firms for these industries must have been very busy dispensing campaign funds and favors. But, maybe we should be satisfied that in the long run, we will be using less oil. Perhaps invading another country like Iraq won't be necessary.

Nothing was discussed about a reduction in the cost of fuel; but, maybe that will be disclosed in a further analysis.

Is there any support in the bill for battery manufacturing and non-fossil fuel electrical generation? Anything for Big Auto? How about something for PHEV and BEV production development?

Also, and hopefully, the next group of politicians, in 2008 when our trickle-down White House is not around any more, can amend the policies to channel more funding into solar generation and storage.

And, one other question: where does coal fit in this policy bill? There are a lot of questions created by this bill.

treehugger

Where the hell are they going to find the land to triple the amount corn. 15 billions gallons of ethanol would requires the total amount of corn produced in this country. Where are they geting the water and how big will be the dead zone in the gulf of mexico ? this bill is insane, a recipe for an complete ecological disaster.

Harvey D

treehugger;

A very good question. Wheat has already hit $10/bushel because farmers are switching to corn. If the price of corn follows (and it may if corn ethanol production is tripled) nobody knows what will be the total effect on other grain price.

It wouldn't be exagerated to assume that corn and wheat price could go as high as $10 and $20 respectively. When feed price goes up, most food price follows. If the Big Mac and Pizzas will double or triple in price.

Business as usual with agrofuels instead of fossil fuels is not the wiser way to go.

Accellerated electrification of our vehicles, HVAC etc is the best way out to ensure lower food price, reduce oil imports and create less pollution and GHG. It is so obvious that it makes you wonder what our politicians are really trying to do.

Henrik

Treehugger

This year’s US corn harvest is 13 billion bushels and currently the ethanol plants can make 2.8 gallons of ethanol per bushels. This conversion rate is increasing a little each year as new production technology is introduced. If the entire US 2007 corn harvest was used for ethanol it would give you 36.4 billion gallons of corn ethanol and enough distiller grains to make up for the missing corn that is used for animal feed in the US. Direct human consumption of corn is minimal. The rest is export which is also wasting energy in transport.

The sad thing about this law is that they actually limit corn ethanol. That is not needed at all. The market will limit it naturally once the demand for corn increases the price to the point where it is cheaper to produce ethanol from other feedstock. I still think the ethanol industry is for this law. After all it guarantees them an almost 40 billion gallon market at possible $2 a gallon or a $80 billion a year industry for ethanol alone. Then add distiller grains and a possible future market for CO2 credits for carbon capture and storage. It is going to be big business but it could be better. Moreover, the business will be big enough to do their own research that could lead to much improved economics in the future and ultimately cheaper fuels.

BMW_4_ever

This is a huge win for the agro-lobby.

How can an "energy bill" not have substantive provisions of new solar and wind power generation?

Reality Czech

Because wind turbines and PV arrays don't contribute to pols.

Reality Czech

Because wind turbines and PV arrays don't contribute to pols.  ADM, XOM and the like do.

treehugger

Henrik

Do you think it is reasonnable to assume that 100% of corm production will go to ethanol ? I doubt that 2$ / gallon is relaistic, don't forget that given the amount of fossil energy you need to make corn ethanol, the price of ethanol will be tight to oil price...and all this just for 15% of oil consumption. In the same time a the current pace it will barely cope with the national gaz consumption increase. Biofuel shouldn't be allowed until the car mileage would have been drastically increased. Corn ethanol should only be authorised in car with better than 40MPG

Troy

I wonder how they're going to measure 35MPG if the gasoline is getting more and more diluted with the lower-btu ethanol?

Would they measure 35mpg with 100% petroleum gasoline or 35mpg with E10 or E20... ? What will the standard be?

Jim

Almost 50% of yearly energy use is consumed by buildings, and 76% of electrical energy use, yet what is the target of the bill?

Establishing building standards for all new building would have a greater impact than improvements in transportation.

Ash

Corn based ethanol is absolutely stupid in economics, ecology, and feasability.

Clearly the farm lobby's pockets are deep enough to circumvent reason. (And given that they own the largest building in DC, it isn't surprising)
And deeper than Toyota, GM, and etc's pockets who all tried to block this legislation entirely.

Also, since CAFE measurments are averaged acrost a company's lineup, this change will have very little impact overall, except to increase the price of cars that people will actually buy.


Patrick

Stop reading the headline and pay attention to the contents:

There are provisions for increasing efficiency in buildings (commercial and residential). There are mandates for DoE to produce new energy standards in a more timely manner.

They tried to push for a mandatory renewable energy portion and repealing tax breaks for oil companies but Bush stated he would veto any bill including these items and there was not enough support in congress to override a veto.

Cervus

Corn ethanol is basically liquid pork. And you can't pin the blame on a singly Party for this. Democrats and Republicans alike are addicted to it. There were over 8,000 earmarks in the last big spending bill, about three times as many as 2006. So much for promises to "clean up Washington".

Jim

Patrick, good point. The bill did not continue energy credits (solar, window replacement, more effecient water heaters, etc) expiring in a couple of weeks, but it does start a study on the effectiveness of these programs!!!!

To the poster earlier though, the mandatory renewable energy portion was on utilities. Germany started a program for national renewable energy with a target of 20% (ours was 15%) and it looks like they are going to hit 30% (re: Nova program titled 'Saved by the Sun'). The German approach was to pay anyone for electricity (at above market prices - but not that much above peak pricing) produced. Now they have their own industry for producing PV panels and the cost is coming down.

Jim

Patrick, good point. The bill did not continue energy credits (solar, window replacement, more effecient water heaters, etc) expiring in a couple of weeks, but it does start a study on the effectiveness of these programs!!!!

To the poster earlier though, the mandatory renewable energy portion was on utilities. Germany started a program for national renewable energy with a target of 20% (ours was 15%) and it looks like they are going to hit 30% (re: Nova program titled 'Saved by the Sun'). The German approach was to pay anyone for electricity (at above market prices - but not that much above peak pricing) produced. Now they have their own industry for producing PV panels and the cost is coming down.

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