Sandia study finds meeting RFS2 requirements unlikely without stronger enforcement mechanism; the importance of drop-in biofuels
06 January 2014
Even if well-known technology, infrastructure, economic and political challenges in meeting the biofuel requirements of the RFS2 mandate are overcome, it is “highly unlikely” that the light-duty vehicle parc will be capable of consuming the RFS2 (Renewable Fuel Standard) mandated volumes of biofuels, according to a new analysis by a team from Sandia National Laboratory.
The Sandia researchers showed that the key to meeting the RFS2 targets is the fuel price differential between E85 fuel and conventional gasoline (low ethanol blends), so that E85 owners refuel with E85 whenever possible. In other words, RFS2 will be satisfied if gasoline becomes significantly more expensive than E85 on a per energy basis. This is, however, the opposite of historic pricing trends, and suggests that policy intervention of a stronger enforcement mechanism will be required to meet RFS2 targets by creating market conditions necessary for greater biofuel consumption.
Another interpretation of the analysis in this paper is that RFS2 compliance through ethanol blendstocks alone is unlikely without enforcement mechanisms. Relying on consumers to purchase ED85 instead of gasohol is too uncertain of an approach to meeting the mandate. However, if the gasohol itself were made entirely from biomass feedstocks, then the outlook would change dramatically. Drop-in biofuels produced at scale and price-competitive with petroleum-based gasoline could greatly increase the probability of reaching the RFS2 targets.
—Westbrook et al.
The Sandia study examines the set of circumstances under which the RFS2 mandate might be satisfied. The researchers use a system dynamics approach to model the competition between powertrains and fuels in the marketplace. Due to the numerous uncertainties, they used a parametric approach to examine a spectrum of possible futures, instead of highlighting a few scenarios.
Their model tracks the evolution of the light-duty vehicle parc in the US, its fuel usage, and corresponding demands for energy stocks. The model has four sub-components: vehicle, fuel production, electricity grid; and energy supply.
The LDV parc is segmented by driver demographics such as population density daily trip distance distributions; and housing type, as well as vehicle descriptors such as state of registration; age; size; and powertrain.
The model begins in 2010 with 220 million LDV spark-ignition (gasoline) vehicles, 9.7 million E85 flex-fuel vehicles; 1.8 million hybrids, and 0.6 million compression ignition (diesel) vehicles. The simulation evolves the LDV parc, stepping through 2050, although most of the analysis in the paper focuses on simulations through 2022.
Among their findings were:
RFS2 is satisfied at extreme oil prices (at least $215/barrel). This oil price encourages biofuel use in the RFS2 timeframe, but not in the long run.
Unless the feedstock price differential becomes extreme (biomass prices below $100 per dry ton and oil prices above $215 per barrel), which deviates from historical price trends, LDV parc biofuel consumption will fall short of the RFS2 mandate without an enforcement mechanism.
Such commodity prices might increase biofuel consumption in the short-term, but discourage use of biofuels in the long-term as other technologies that do not rely on any gasoline blendstock may be preferable.
The RFS2 program goals of reducing fossil fuel consumption and transportation greenhouse gas emissions could be achieved through other pathways, such as notable improvements in conventional vehicle efficiency.
If the extreme oil and biomass price trends that lead to RFS2 compliance persisted through 2050, it would have a marked impact on the characteristics of the LDV parc. The ethanol consumption profile through 2050 demonstrates that the peak years of biofuel use overall come just after the final year of the RFS2 mandate. Although the biofuel quotas remain in effect past 2022, extremely high oil prices act as a strong driver for other alternative fuel vehicles, such as EVs and natural gas vehicles.
The reason those powertrains do not become more prominent until approximately 2030 is that they have only recently been introduced to the public and are not yet fully offered for every manufactured model by automakers. Since E85 fuel still contains a significant fraction of gasoline, it too is a more expensive fuel choice than electricity or compressed natural gas (CNG).
In fact, by 2030, E85 supplies only 11% of the total mileage traveled, compared to its high of 32% in 2022. Thus, the economic conditions that favor increasing biofuel usage in the next 10 years to comply with RFS2 do not necessarily promote longer term usage of biofuels. Rather, they promote the use of powertrains that do not rely on any type of gasoline blendstock, E85 included.
—Westbrook et al.
Resources
Jessica Westbrook, Garrett E. Barter, Dawn K. Manley, Todd H. West (2014) “A parametric analysis of future ethanol use in the light-duty transportation sector: Can the US meet its Renewable Fuel Standard goals without an enforcement mechanism?” Energy Policy, Volume 65, Pages 419-431 doi: 10.1016/j.enpol.2013.10.030
the importance of drop-in biofuels
They talk about drop in and then about E85, just make synthetic gasoline, diesel and jet fuel from biomass. The oil companies won't like that, but too bad!
Posted by: SJC | 06 January 2014 at 02:17 AM
Mandates or subsidies. The winner will be designated, and monopoly rents collected for sharing with those who do the designating.
Posted by: Engineer-Poet | 06 January 2014 at 08:35 AM