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Bush Administration Sends Alternative Fuel Standard Act to Congress; Gov. Schwarzenegger Encourages Different Approach

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



I think it was just a typo, 330 kw should have been 330 kwh. Note if you multiply it by 24 you get the 8000 kwh hours used daily by the PHEV.

All this doubling the CAFE and higher taxes have worked in Europe show a lack of knowledge. I will repeat this, with the CAFE standards, the average mileage has increase, repeat increased, since 1986. That is 21 years of failure. The approach is stupid and doomed to failure and does not recognize the need for a market driven fix. Only by establishing a fuel price structure so that the more you use the more you pay per gallon, will we trigger conservation. This is fundamental.

Lets consider the across the board taxes in Europe that some claim have worked so well. How much have they cut fuel consumption? Not at all. Complete failure to reduce consumption. Rather, the consumption has increased since 1990 28%.

The idea that poor people can cut their household energy use by 30% is absurd. They are already making a good faith effort to minimize their bills. And the people with money live in big houses with big air conditioners, and drive big SUV's with big 400 hp V8s. They will point to their energy efficient 25 cu.ft refrigerator and smile.


The real issue here is the inclusion of COAL-TO-LIQUID as an "alternative fuel"

CTL produces 2x the carbon emissions as normal liquid gasoline/diesel.

While effective at reducing oil consumption, it would drastically increase CO2 emissions.


It also opens the way for biofuels produced using coal electricity.

Which when done with corn ethanol for instance, also produces more carbon than just using gasoline.


Thats why it's so important to focus on carbon.

Since otherwise the cheaper solution is to increase atmospheric carbon pollution, not decrease it.

Kit P.

It is about focusing on solutions that provide an adequate supply of energy. AGW should not be a litmus test for energy. Of all the environmental impacts of transportation, AGW is the least significant if there is any impact at all.


It is interesting that Arnold wants the market to solve the problem. This is the standard response from some people. The market may not work in all situations the best way possible. Alternative energy is capital intensive, as long as capital goes where the highest return is, it may not go where the greatest good is.


Re: Kit P.

Well supply is never going to be an issue in the forseable future.

The issue is price.
And what this ammounts to is a subsidy towards the price of gasoline/diesel.

And if we aren't going to accomplish anything besides a drop in price.

Then why don't they just subsidize the price of gasoline directly, and cut out middleman?

(The middleman in this case being Archer Daniels Midland, posterchild for corporate welfare)

Kit P.

The issue is alternate sources of transportation fuel. Since the goals for 2012 of the 2005 Energy Bill will be met in 2007 with very positive results, why not increase the goal? While I do not think ADM is building the the new facilities, who cares who get the job done as long as it gets done.

Cheryl Ho

There are developments in DME in China today.
We see great potential for DME as a clean alternative fuel . The present diesel oil is a major source of air pollution from diesel engine of trucks and busses in large city like Tokyo. The potential market of diesel oil substitute is larger than LPG. DME is one of ideal fuel for diesel engine. DME vehicles were demonstratively manufactured in Japan, China and Korea and their driving test already started. Practical durability fleet test of a DME truck is under going in Japan.

We are pleased to organise a conference on China taking the lead in the DME market in production from coal and Japan and Korea activities.

If you would like to know more on COAL to Syngas to DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:

DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation

For more information:

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