Bush Administration Sends Alternative Fuel Standard Act to Congress; Gov. Schwarzenegger Encourages Different Approach
21 March 2007
Energy Secretary Samuel Bodman and EPA Administrator Stephen Johnson sent a joint proposal letter to the chairman and ranking member of the House Committee on Energy and Commerce Monday proposing draft legislation requiring 35 billion gallons of alternative motor fuel—15% of projected gasoline use—by 2017.
The new standard would require US ethanol and alternative fuel consumption to reach 10 billion gallons in 2010. Alternative fuel use would then slowly rise through 2014, and ramp up the following three years to reach 35 billion gallons annually in 2017.
The new Alternative Fuel Standard Act, one of the initiatives highlighted by President Bush in his State of the Union address this year (earlier post), would supplant the existing Renewable Fuel Standard component of the Energy Policy Act of 2005. That goal was for 7.5 billion gallons of alternative fuel by 2012.
The Alternative Fuel Standard Act also calls for a credit, banking and trading program that will encourage production of alternative fuels and reduce price volatility.
The legislation, according to Bodman and Johnson, will help meet the goal of reducing gasoline consumption by 20% in 10 years. The remaining 5 percent reduction is expected to come from revisions to the Corporate Average Fuel Economy (CAFE) standards.
In a reaction to the submission of the legislation, California Governor Arnold Schwarzenegger, who has ordered a Low Carbon Fuel Standard for the state of California (earlier post), cautioned against a policy prescription that (a) specifies a technology outcome and (b) doesn’t address greenhouse gas emissions.
While I applaud President Bush’s commitment to increase the production and use of alternative fuels, effective energy policy requires a long-sighted plan that combats global warming, encourages market-based economic growth and reduces our country’s dependence on oil.
By favoring one technology over another, the Alternative Fuel Standard Act allows government rather than markets and consumers to determine the alternative fuel winners and losers. And by not capping emissions, it potentially enables more global warming since some alternative fuels may produce more greenhouse gas emissions than current fuels.
California has been a global leader on this issue with passage of our Global Warming Solutions Act and the establishment of the Low Carbon Fuel Standard. I encourage President Bush and Congress to pass aggressive legislation that addresses this country’s energy needs realistically and comprehensively.—Governor Schwarzenegger
Once you meet 15% renewable liquid fuels, there is little need for fossil fuels for the remainder.
The remaining 85% could be easily covered by the electric-range of PHEVs.
That needn't lead to higher coal use either to produce the electricity - to support 10,000 miles electric range per year requires (on average) about 3,000 kWh of electricity, or about 8 kWh per day. The average house only needs to increase electrical efficiency, by reducing their average use by 330 watts, to cover this.
Changing light bulbs, freezers, refrigerators etc and installing other low-energy appliances would cover this 330 watts easily in many if not most US homes.
Posted by: clett | 21 March 2007 at 02:54 AM
Lets burn all the rainforests and plant sugar cane to provide the ethanol. Will need a lot of that given the poor fuel efficiency of ethanol.
Those rainforests contain lots of horrid spiders anyway, so down with them trees. Good on you George.
Posted by: John Baldwin | 21 March 2007 at 03:41 AM
Lets see, if every driver increases his or her electrical comsumption by 8 KWH per day, we can offset it by decreasing each households use by 330 KW per hour.
The other way to say this is to decrease the average monthy consumption by 30%, when actual energy use is increasing in spite of compact floresent bulbs, energy efficient refigerators, and wearing sweaters inside the house. The growth in demand comes from more people using more energy even while using it more efficently.
No, shifting off fossil fuel requires producing electrical energy from non-fossil fuel sources, as we shift from burning fossil fuel in our vehicles by using hybrids and biofuels. Otherwise we are simply shoveling sand against the tide.
Posted by: Van | 21 March 2007 at 05:15 AM
What you're proposing is doable. We managed to reduce our 100% electric home daily consumption from 65 KWh to 35 KWh with similar measures. Next objective is to reduce to 25 KWh/day by moving to a better built place.
The energy saved is enough to operate 3 PHEVs or BEVs. Most (but not all) Amercian/Canadian could do the same.
We have also reduced fuel consumption by 50% by getting ride of our V-8 and V-6 gas guzzlers and replacing them with more efficient 4 cyl ICE and hybrids. We plan to buy our first PHEVs in 2009/2010.
Note: We can get up to $4000 rebate/credit on the purchase of more fuel efficient vehicle (5.5 L/100Km or better). Gas guzzler buyers have to paid a penalty of up to $4000 (above 13.5 L/100KM)
The new energy required for population growth could come from cleaner sources such as wind, solar, waves and even nuclear.
Burning most (if not all) our garbage and waste (many million tonnes a year) with plasma burners could also produce clean electricity while getting rid of growing polluting refuse that nobody wants. The by-product (glass like pebbles) can be used as road building material.
Posted by: Harvey D. | 21 March 2007 at 05:43 AM
In the US we need to utilize farm land that is in the CRP program. This farm land is just sitting there not being used to grow anything.
Posted by: Brian | 21 March 2007 at 05:49 AM
At least from my experiences, most CRP land is not ideal for farming. Land that ended up as CRP land was not wanted by the local farmers due to it being swampy, infertile, rocky, inaccessable, or just not a large enough parcel to be worth working.
And they are not "sitting there not growing anything". They are dedicated to provide pockets of native flora/fauna in the midst of miles and miles of monoculture cropland. They provide safe havens for wildlife that we otherwise have no shelter when the fields are harvested.
Posted by: Darwin | 21 March 2007 at 06:37 AM
Finally, this is Awesome.
Posted by: J | 21 March 2007 at 07:27 AM
'California has been a global leader' in a culture of consumption of resources. They can be proud of using less energy to heat their houses than those wasteful Vermounters.
Notice that lead in producing biofuels and renewable energy electricity is occurring in other states. Biofuels is one area where production has exceeded expectation. Wind is doing well too. The 2005 Energy Bill was aggressive and comprehensive. It is likely that some of the things in the 1000+ pages legislation will bear fruit, but the ball is rolling.
I think carbon caps are extremely bad policy and poorly thought out.
Posted by: Kit P. | 21 March 2007 at 08:12 AM
It is easy to say we should do things. In the present political climate, conservation is not an option. So people want to drive big cars and have big homes and the rain forests and where we will get energy are abstract. It is also easy to say that if we give the consumers a choice they will choose the energy efficient car or home. I am not so sure.
I was pondering the speed limit on the autobahns. People like performance cars. If you can give them one that goes like a rocket and gets 30 mph, would they pay more for it? I think that is a good question to ask before you go to the drawing board in a consumer driven market economy.
Posted by: sjc | 21 March 2007 at 08:15 AM
If politicans (and the citizens who elect them) were serious about reducing oil usage they would start a ramp up in taxes on fossel fuel and the consumption pattern would start to change. It is also possible to put a higher purchase tax on vehicles based on the amount they pollute.
These are not new ideas; the Europeans have been doing this for decades.
At the very least, congress should remove the tax incentive for businesses to buy heavy vehicles. As a small businessman I can write off in one year almost the entire purchase price of a vehicle that weighs over 6,000 pounds but only a fraction of a vehicle which gets 50 mpg.
Posted by: Ed | 21 March 2007 at 09:04 AM
I agree with Ed. The solution is higher taxes for fuel. It has worked really well for Europe. With this method, you will quickly see a trend towards less consuming vehicles. But then I suspect that we are protecting the big three if we don't raise the fuel taxes.
Posted by: Richard | 21 March 2007 at 09:35 AM
The only way your ever going to see a hihjer tax on fuel is if it comes from swapping out some OTHER tax. And right now the only alternative that will work long term is converting from income to consumption based taxing. As letaface facts the lobbies on all sides of that hornets nest are BIG and NASTY. I dont realy think any ONE person or small group has enough clout to hammer through anything useful as far as taxes go.
Posted by: wintermane | 21 March 2007 at 09:55 AM
Americans will never accept a high fuel tax regime like what they have in Europe. Decades of suburbanization have made us too spread out. Our population density is too low for practical mass transit. We are much less urbanized than Europe, making owning a car a necessity even if it's a $500 junker.
Posted by: Cervus | 21 March 2007 at 10:09 AM
If our density is too low for mass transit, what do you propose we should do to wean ourselves off the arab teet? Nothing?
Regardless of whether you're talking a few years or twenty years, the plentiful oil will slow to a trickle within our lifetimes. We can't wait for that to happen and then react, we need to plan for it.
I know most Americans won't stomach the higher tax, but then again most americans do want to get off the oil. It seems we want to do it, but we won't vote to do.
I think we need a multipronged marketing campaign to push for a switch to post oil tecnology. Market global warming to the lefties and market nation and financial security to the righties. Both would have the same message, including raising the gas tax.
If you want to reduce income taxes as a countermeasure, you'd have to scale it back up as consumption of gas decreases.
Posted by: darwin | 21 March 2007 at 10:33 AM
What it's ultimately going to take is many billions of dollars in private investment in alternative fuels that run on the current vehicle fleet (like biobutanol) and work with American vehicle preferences.
Posted by: Cervus | 21 March 2007 at 11:01 AM
what do you propose we should do to wean ourselves off the arab teet?
Take military possession of the arab teet.
Posted by: DS | 21 March 2007 at 11:05 AM
"take military possession of the teet".
That's one idea, and it might buy a little time.
But is it worth it if it only extends the oil supply a few more years? Do you really think Iraq has that much oil? And if so, you think the rest of the world will stand by and let us monopolize it as worldwide supply outside of Iraq is crashing?
Also, I think your idea has been tried before and failed. Then again, we were able to push aside the native americans....
Posted by: darwin | 21 March 2007 at 11:13 AM
When you're joking you might want to include ";)" just to make sure that nobody thinks you're serious.
Posted by: Neil | 21 March 2007 at 11:35 AM
If he's joking, than I apologize.
Its hard to tell sometimes, the people in power right now really do believe that line of thinking, and many people still support it.
Posted by: darwin | 21 March 2007 at 11:45 AM
Mandating results rather than methods is the smart way to go. How one motivates people to acheive those results is a second question.
I'm for doubling CAFE standards for all passenger vehicles (and and if a truck seats 3 or more it is a passenger vehicle)in the next 15 years. I'm also for using a flexible tax to create a "floor" for oil prices. Probably $70/barrel would do.
Caps are interesting but require more control. Think of it like a diet. If you just say, "I will not eat ice cream," but then substitute Girl Scout cookies, you don't lose any weight. If you cap it and say, "I will not eat more than 1800 calories per day," you will probably lose weight no matter what stuff you eat. Counting calories (or carbon) is not as simple, and requires more effort. Raising the cost of food (or oil), doesn't necessarily cause affluent citizens to cut back, but it does hit lower income citizens harder. If we could make caps work, they would probably be the best for the average consumer, but enforcement is a challenge.
However, taxes and CAFE standards don't get people off of oil unless there is a lower-cost alternative. Every renewable energy source helps.
One of the things the government can do is buy billions of dollars worth of photovoltaic capacity. The reason microchips are cheap today is because the government bought huge amounts of chips for missiles in the 1960's and it jumpstarted the market. There was still competition and a free market, but it was pulled up the learning curve and economies-of-scale curve much faster because of the early demand of a large, predictable customer. There have to be some federal buildings and military bases in the South and South West that could use the solar power and resilience of being mostly off the grid.
Posted by: C Harget | 21 March 2007 at 02:57 PM
"One of the things the government can do is buy billions of dollars worth of photovoltaic capacity."
One of the things citizens can do is buy photovoltaic panels instead of flat panel TVs. That way there would be a chance that silicon production would be able to keep up with the demand and each household would begin to generate electricity rather than just consume it.
If Wal-Mart or Costco had solar panels displayed along with TVs at least the consumer would know there is an option.
Another way would be to sell panels on a solar farm managed by a big trusted name like Costco. Sort of a condo arrangement.
Posted by: Ed | 21 March 2007 at 03:14 PM
While I agree with Gov. Schwarzenegger that the bill neglects the carbon footprint of some alternative fuel technologies, government mandates for such a new/world-changing industry are necessary.
Without government support, investors would not be diving in head-first into alternative energy technologies. I do not think we can place biofuel investments in the same category as traditional investments. If biofuels were synthetic gasolines that could be used in un-modified engines and were produced cheaper than conventional gasoline, government support would not be necessary. Biofuels have to prove themselves with the help of the government to gain consumer adoption.
I hope that Energy Secretary Bodman considers Gov. Schwarzenegger's concerns and adjusts the bill accordingly with sound, unbiased (is this possible in this industry!?) research.
Posted by: Francesco DeParis | 21 March 2007 at 03:42 PM
“In addition to ethanol, alternative fuels under the bill would include biodiesel and motor fuel made from municipal solid waste, NATURAL GAS, hydrogen, COAL-DERIVED liquid fuels, electricity and other fuels to be determined by the Energy Department.”
Correct name for this Act would be “Alternative to crude oil motor vehicles fuel Act”. It has nothing to do with GHG emissions, not much to do with fuel efficiency (should be addressed separately), and only partially to do with renewable fuels and dependence on oil import.
Posted by: Andrey | 21 March 2007 at 09:01 PM
Posted by: Jon Abbott | 22 March 2007 at 03:51 PM
Someone posted the 8 KWH can be replaced by 330 KW. You are confusing Power and Energy, with that statement.
A KW is the instantaneous power produced for an instant, or the rate of Energy consumed. A KWH is the Energy of 1 KW produced for 1 hour. 330KW is an instantaneous power of 330 thousand watts or about 412 HP. If you maintain that power output for a certain time it equals teh Energy quantity of 8 KWH.
How long is that time @ 330 KW ? About 1 and a half minutes or 87 seconds.
Some people are confusiong the existing surplus capacity of th Electric grid and misunderstand the statement "We wouldn't have to build a single new Power plant to convert the US to entirely PHEV vehicles and provide the electricity." But we would have to increase the amount of fuel those present plants consume.
When a power plant is idleing under closoe to no load it requires only a small amount of fuel. When working hard to generate lots of electricity it consumes a lot more fuel. You know this, intuitively. Your car burns lots more gas when it's loaded down or pulling a trailer up a mountain, than it does when its simply idling at a stop light.
The significant difference is that almost one third the electricity is generated without fossil fuels, in nukes and hydro and wind mills etc. Another portion more than half comes from coal fired power plants that emit much much less pollution than even the cleanest auto fleet. Only a few percent comes from burning oil, and only in situations of peak demand.
Between PHEVs and bio fuels the US is fully capable of being free of needs for imported oil and the OIL sheiks. That is the real need and as the scientific evidence accumualtes that concerns about atmsopheric CO2 are turning out to be scientifically wrong, it makes little other difference.
Posted by: Stan Peterson | 22 March 2007 at 04:42 PM