Transcript Slide 1

The Renewable Fuels
Standard and Beyond
Governors' Ethanol Coalition
February 28, 2007
Sarah Dunham, Director
Transportation and Climate Division
EPA’s Office of Transportation and Air Quality
What a Difference a Year Makes:
Increasing Ethanol Projections
18.0
16.0
Ethanol Use (Bgal)
14.0
76% of all Gasoline @E10
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Year
Per RFS
Per AEO 2006
Per AEO 2007
Assuming 100% E10
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Its Been a Busy 18 Months
Renewable Fuel Standard Rulemaking
• Extensive stakeholder coordination
• Proposed the rule in Sept 2006
• FRM expected within just a few weeks
– An unprecedented schedule for a rule this
significant
2006
2005
2007
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
EPAct
2006 Default
Rule
RFS
proposal
RFS
final rule
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The RFS – The Program Basics
• The Energy Policy Act (EPAct) specified renewable fuel
volumes
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2006: 4.0 billion gallons/yr
2007: 4.7
2008: 5.4
2009: 6.1
2010: 6.8
2011: 7.4
2012: 7.5
2013+: Same percent of renewables for 2012 (0.25 billion gal of
which must be cellulosic ethanol)
• Each year EPA must convert RFS into percent of gasoline
production standards that apply to refiners, importers,
gasoline blenders.
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Relative Value of Different Renewables
• EPAct specifies that 1 gal of cellulosic ethanol counts as
2.5 gallons for compliance purposes.
• We proposed to base the “Equivalence Value” or credit
for other renewables on volumetric energy content in
comparison to ethanol (adjusted for renewable content):
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Corn-ethanol:
Cellulosic biomass ethanol:
Biodiesel (alkyl esters):
Renewable diesel:
Biobutanol:
1.0
2.5 (mandate)
1.5
1.7
1.3
• Sought comment on life cycle energy, petroleum, or
green house gas (GHG) emissions as the basis for these
values.
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Lifecycle GHG differs across
renewable fuels
• Compared to an energy equivalent amount
of gasoline or diesel fuel replaced
– Ethanol from corn kernels:
– Ethanol from cellulose:
– Ethanol from sugar cane:
– Biodiesel from soy:
– Biodiesel from waste grease:
22 % lower GHG
91 % lower GHG
56 % lower GHG
60 % lower GHG
76 % lower GHG
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What The Country May Look Like in 2009
9.6 Bgal Ethanol
100% E10
50-100% E10
<10% E10
10-50% E10
Not Pictured
AK: 0% ETOH
HI: 100% ETOH
DC: 100% ETOH
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Emissions & Air Quality*
Nationwide
Localized maximum
CO
1.3 - 3.6 % decrease
N/A
Benzene
1.7 - 6.2 % decrease
N/A
NOx + VOC
0.5 - 1.0 % increase
Ozone
~ 0.1 ppb increase
3 - 6 % increase
(Summer)
0.1 - 0.2 ppb increase
• Impacts will vary by region, since renewable fuel use
varies significantly
•
Incremental Impacts in 2012 compared to 2004 reference case
(Results are from NPRM for RFS)
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Costs of Renewable Fuels
Production & Distribution Costs
Ethanol
$1.30 - 1.36 per gal
Biodiesel
$2.00 - 2.22 per gal
• Increases in the use of renewable fuels are expected to
add 0.3 - 1 c/gal to the cost of gasoline for the nation as
a whole at $47/bbl crude)*
• For the Final Rulemaking we will assess impacts on
market prices of corn and soybeans that might impact
the Ag sector economy and the impacts on energy
security from reduced imports
* Incremental Impacts in 2012 compared to 2004 reference case
(Results are from NPRM for RFS)
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Energy and CO2*
• Petroleum consumption in the transportation
sector will be reduced 1.0 - 1.6 %
– Equivalent to 2.3 - 3.9 billion gal petroleum in 2012
– ~95% of the reduction is estimated to be from imports
• Transportation sector greenhouse gases (CO2
equivalent) will be reduced by 0.4 - 0.6 %
– Equivalent to 9 - 14 million tons in 2012
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Incremental Impacts in 2012 compared to 2004 reference case
(Results are from NPRM for RFS)
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Next Steps
• FRM expected out within a few weeks
• Implementation workshop being arranged
(NPRA has agreed to organize)
• Implementation – the 3 Rs
– Registration, Recordkeeping, Reporting
• Significantly expanded Renewable and
Alternative Fuel Volumes?
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A Renewable and Alternative
Fuel Standard?
• The President called for a commitment to reduce
petroleum-based gasoline consumption by 15%
by 2017 through renewable plus alternative fuels
• 15% reduction in 2017 translates into a target of
35B gallons of renewable plus alternative fuel use
in transportation system
• To reach goal, must consider several issues:
– Available fuel feedstock sources
– Fueling infrastructure
– Appropriate fuels and fuel blends
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Available Fuel Sources
• Already, ethanol production is expected to outpace
the RFS requirements
– EIA’s Annual Energy Outlook for 2007 projects 11.2
billion gallons ethanol by 2012
• Domestic corn ethanol will continue to be the most
significant source of renewable fuel
– Estimated to be 15B gallons maximum by National Corn
Growers Association
• Optimistic that cellulosic ethanol will begin to
contribute to the market over the next decade
• Biodiesel will also continue to grow
• Other alternatives (e.g. CNG, LPG, CTL, etc.)
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Fueling Infrastructure
• Current ethanol fuels are blends of gasoline and
ethanol - E10 and E85
• E10 nationwide would use about 15B gallons
• E85 would have to expand significantly for ethanol
volumes much higher than 15 billion gallons
– Will need to significantly expand the number of pumps
from today’s 1100
– Will need to increase number of flexfuel vehicles up from
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today’s 6M
Potential Fuel Blends
• E85 may not be our only option
• Blends above E10 other than E85 are being
discussed for use
– Minnesota passed law mandating E20, pending federal
approval
• Testing of blends by EPA required to ensure
– Quality of fuel maintained
– Emission standards are met
• Use of other blend ratios in FFV’s are possible
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Future Plans
• Desire to design a system that accomplishes two
goals: energy security and climate change
• Renewable and Alternative Fuels are one part of
the solution, but not the only solution
• Role of EPA is to use our technical and
regulatory expertise to help policy makers
implement these goals
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For Further Information…
ww.epa.gov/otaq/renewablefuels/index.htm
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