GEC Meeting 2005: GEC Meeting 2005: The Environmental The Environmental Benefits of EthanolBenefits of Ethanol

March 1, 2005March 1, 2005

Carol Werner, Executive DirectorCarol Werner, Executive DirectorEnvironmental & Energy Study Environmental & Energy Study

Institute (EESI)Institute (EESI)122 C St. NW, Suite 630122 C St. NW, Suite 630Washington, DC 20001Washington, DC 20001

Phone: (202) 662-1881 Fax: (202) 628-Phone: (202) 662-1881 Fax: (202) 628-18251825

www.eesi.orgwww.eesi.org

Environmental and Energy Environmental and Energy Study Institute (EESI)Study Institute (EESI)

Dedicated to promoting Dedicated to promoting sustainable societies through sustainable societies through innovative policies on energy, innovative policies on energy, climate, transportation, climate, transportation, agriculture, and smart growth.agriculture, and smart growth.

Founded in 1984, by a Founded in 1984, by a bipartisan Congressional bipartisan Congressional CaucusCaucus

Provides timely information Provides timely information regarding science, policy, and regarding science, policy, and technologies.technologies.

Organizes ~20 Congressional Organizes ~20 Congressional briefings a year.briefings a year.

Builds Coalitions and Builds Coalitions and networks.networks.

Publishes 3 electronic Publishes 3 electronic newsletters.newsletters.

www.eesi.org

Environmental Drivers for Environmental Drivers for Shifting Current Fuel UseShifting Current Fuel Use

Air pollution from Air pollution from emissionsemissions– SOx, NOx, CO, VOC’sSOx, NOx, CO, VOC’s

Water PollutionWater Pollution– MTBE, Oil Spills, run-offMTBE, Oil Spills, run-off

Climate ChangeClimate Change– 30 percent of our CO2 30 percent of our CO2

emissions from emissions from TransportationTransportation

– 2 percent of global CO2 2 percent of global CO2 emissions from emissions from California.California.

Emissions from Petroleum Emissions from Petroleum based fuelsbased fuels

COCO-70-90% of total emissions-70-90% of total emissions NONOxx- 45-50% of total emission- 45-50% of total emission

– 178,000 mtons178,000 mtons**, , 52.7 million mton CO52.7 million mton CO22 equiv. (2003) equiv. (2003)

VOC’sVOC’s- 40-50% of emissions - 40-50% of emissions COCO22- 30% of total emissions- 30% of total emissions

– 1.87 billion mtons1.87 billion mtons**(2003)(2003)

SOSOxx-5% of total emissions from transport.-5% of total emissions from transport.*Data from EIA for Transportation Sector. Emission levels for 2004 not yet publishedPercentages Source: Rodrigue, J.P. “Air Pollutants Emitted by Transport System,” Hofstra University, 8/25/03

Oil SpillsOil Spills Total Oil Spills since Total Oil Spills since

2000:2000:– 83 spills of 7-700 tons83 spills of 7-700 tons– 19 spills of >700 tons19 spills of >700 tons– total = 146,000 tonstotal = 146,000 tons

1.5 million gallons1.5 million gallons spilled into U.S. spilled into U.S. oceans in a typical oceans in a typical year. year. (assuming no large (assuming no large spills)spills)

Source: ITOPF [International Tanker Owners Pollution Federation]http://www.itopf.com/index2.html

Source: Environmental Protection Agency

The “Real Cost” of OilThe “Real Cost” of Oil

Total U.S. Oil Imports:Total U.S. Oil Imports:– Currently 11.8 million Currently 11.8 million

barrels/day barrels/day (55% of (55% of U.S. petroleum use)U.S. petroleum use),,

– price ranging from price ranging from $42-$52/barrel $42-$52/barrel [2/24/05][2/24/05]

– $166 billion$166 billion spent on spent on net U.S. petroleum, net U.S. petroleum, imports in 2004.imports in 2004.

Energy Security Energy Security ConcernsConcerns

Growing India and China Growing India and China Oil DemandOil Demand Source:

EIA: http://www.eia.doe.gov/emeu/ebr/ebrnoi.html

Ethanol: AllowsEthanol: AllowsVariety of FeedstocksVariety of Feedstocks

Corn-2004 consumed 11% of corn Corn-2004 consumed 11% of corn producedproduced

Sorghum- 2004 consumed 11% of Sorghum- 2004 consumed 11% of sorghum produced.sorghum produced.

Cellulosic Ethanol-Cellulosic Ethanol-– Corn fiber, corn stover, switchgrass, willow, Corn fiber, corn stover, switchgrass, willow,

hybrid poplars, sugar cane bagasse, Ag wastes, hybrid poplars, sugar cane bagasse, Ag wastes, etc.etc.

– Feedstocks available across the countryFeedstocks available across the country– Critical for major growth of % of transport fuelCritical for major growth of % of transport fuel– Builds urban/rural bridge: Good for Americans- Builds urban/rural bridge: Good for Americans-

not just Ag.not just Ag.

Source: Renewable Fuels Association

Benefits of 10% Ethanol-blends Benefits of 10% Ethanol-blends on Air Pollutionon Air Pollution

Reduces GHG emissions by 12-19%Reduces GHG emissions by 12-19%– 5.7 million mtons CO5.7 million mtons CO22 emissions avoided in emissions avoided in

20032003 Reduces CO emissions by 30%Reduces CO emissions by 30% Reduces exhaust VOC’s by 12%Reduces exhaust VOC’s by 12%

– Sign. Formaldehyde reductions, offset slight Sign. Formaldehyde reductions, offset slight increase in PAN and acetylaldehyde.increase in PAN and acetylaldehyde.

Reduces toxic emissions by 30%Reduces toxic emissions by 30%– Backs out >50% of benzeneBacks out >50% of benzene

Higher blends yield much greater benefitsHigher blends yield much greater benefits

Source: Renewable Fuels Association, http://www.ethanolrfa.org/factfic_envir.html

Additional Environmental Additional Environmental Benefits of EthanolBenefits of Ethanol

BiodegradableBiodegradable- no problem in case of - no problem in case of spill or leak.spill or leak.

Alternative to traditional waste disposal Alternative to traditional waste disposal ((e.g. e.g. forest thinnings, rice straw, MSW used for cellulosic forest thinnings, rice straw, MSW used for cellulosic ethanol)ethanol)

Public Health-Public Health- 55% or 158 million 55% or 158 million Americans live in counties with unhealthy Americans live in counties with unhealthy levels of ozone or particulate matter.*levels of ozone or particulate matter.*

Sustainable-Sustainable- unlike oil unlike oil~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~BUT….BUT….Environmental misinformation on Environmental misinformation on

ethanol must be addressed….ethanol must be addressed….

*2004 State of the Air Report, American Lung Association

Reductions in GHG Emissions Reductions in GHG Emissions due to Ethanol Usedue to Ethanol Use

Source: International Energy Administration. Biofuels for Transport, an International Perspective,May 11, 2004

Federal Policy DriversFederal Policy DriversKyoto Protocol entered into force Feb. 16Kyoto Protocol entered into force Feb. 16

Proposed Climate LegislationProposed Climate Legislation– Sens. McCain (R-AZ) and Lieberman (D-CT) and Reps. Sens. McCain (R-AZ) and Lieberman (D-CT) and Reps.

Gilchrest (R-MD) and Olver (D-MA) offered:Gilchrest (R-MD) and Olver (D-MA) offered: Climate Stewardship Act Climate Stewardship Act (S. 342, HR. 759)(S. 342, HR. 759) : Sets mandatory : Sets mandatory

caps on COcaps on CO2 2 as well as cap and trade system. as well as cap and trade system. – Sen. Hagel (R-NE) offered 3 bills 2/16/05:Sen. Hagel (R-NE) offered 3 bills 2/16/05:

Climate Change Technology Deployment in Developing Climate Change Technology Deployment in Developing Nation’s Act Nation’s Act (S. 386)(S. 386): : share tech. advances with developing share tech. advances with developing nationsnations

Climate Change Technology Incentives Tax Act Climate Change Technology Incentives Tax Act (S. 387)(S. 387): : makes permanent the current CC R&D tax incentive.makes permanent the current CC R&D tax incentive.

Climate Change Technology Deployment Act Climate Change Technology Deployment Act (S. 388)(S. 388): : encourage tech. demonstration projects in US.encourage tech. demonstration projects in US.

– Sen. Jeffords (I-VT) offered:Sen. Jeffords (I-VT) offered: Clean Power Act of 2005 Clean Power Act of 2005 (S. 150)(S. 150)::to amend the Clean Air to amend the Clean Air

Act, allows for the use of RET’s [wind, biomass, landfill gas, Act, allows for the use of RET’s [wind, biomass, landfill gas, geothermal, solar thermal, and renewable-based fuel cells]geothermal, solar thermal, and renewable-based fuel cells]

NOTE: Sen. Carper will be introducing climate legislation shortly. Viewed as ‘compromise’ of Clear Skies Act and Climate Stewardship Act.

– Rep. Lynn Woolsey (D-CA) Rep. Lynn Woolsey (D-CA) ““The Renewable Energy and Energy Efficiency Act The Renewable Energy and Energy Efficiency Act

(REEA)” (REEA)” (HR. 737)(HR. 737),, 2/9/05, with a goal of 20% of 2/9/05, with a goal of 20% of power coming from non-hydro renewables by 2020. power coming from non-hydro renewables by 2020. Authorizes $12.3 billion over next 5 years for R&D Authorizes $12.3 billion over next 5 years for R&D and commercialization.and commercialization.

– Sen. Jeffords (I-VT) and Sen. Collins (R-ME)Sen. Jeffords (I-VT) and Sen. Collins (R-ME) ““Renewable Energy Investment Act of 2005” (Renewable Energy Investment Act of 2005” (S. 427S. 427) )

2/17/05, establishes an RPS of 5% in 2006 and 20% 2/17/05, establishes an RPS of 5% in 2006 and 20% in 2020 from domestic renewable energy sources, in 2020 from domestic renewable energy sources, such as solar, wind, and biomass energy such as solar, wind, and biomass energy technologies. technologies.

– Rep. Udall (D-CO) and Rep. Leach (R-IA)Rep. Udall (D-CO) and Rep. Leach (R-IA) (HR. 963)(HR. 963), 2/17/05, establishes an RPS of 10% by , 2/17/05, establishes an RPS of 10% by

2017 and 20% by 2027.2017 and 20% by 2027.

Pending Renewable Portfolio Pending Renewable Portfolio Standard LegislationStandard Legislation

Pending Federal Biofuel LegislationPending Federal Biofuel Legislation

– Rep. Kaptur (D-OH) offered Rep. Kaptur (D-OH) offered Biofuels Energy Independence Act of 2005Biofuels Energy Independence Act of 2005 (HR.388)(HR.388)

to provide for a Biofuels Feedstocks Energy Reserve to provide for a Biofuels Feedstocks Energy Reserve and to authorize USDA to make and guarantee loans and to authorize USDA to make and guarantee loans for the production, distribution, development, and for the production, distribution, development, and storage of biofuels.storage of biofuels.

– Rep. King (R-IA) offeredRep. King (R-IA) offered ((HR. 36)HR. 36) to amend the tax code to increase tax to amend the tax code to increase tax

credits for small agri-biodiesel and small-ethanol credits for small agri-biodiesel and small-ethanol producers.producers.

– Renewable Fuel StandardRenewable Fuel Standard– Discussions taking place in House and Senate regarding Discussions taking place in House and Senate regarding

new goals, above 5 billion gallons.new goals, above 5 billion gallons.

State Policy DriversState Policy Drivers Climate Action Plans:Climate Action Plans:

– 28 States 28 States [AL, CA, CO, CT, DE, HI, IA, IL, KY, MA, MD, ME, MN, MO, MT, [AL, CA, CO, CT, DE, HI, IA, IL, KY, MA, MD, ME, MN, MO, MT, NC, NH, NJ, NM, NY, OR, PA, RI, TN, UT, VT, WA, WI] NC, NH, NJ, NM, NY, OR, PA, RI, TN, UT, VT, WA, WI]

Regional Climate Initiatives:Regional Climate Initiatives:– Regional Greenhouse Gas Initiative (RGGI)Regional Greenhouse Gas Initiative (RGGI)

9 NE and Mid-Atlantic States [CT, DE, MA, ME, NH, NJ, NY, 9 NE and Mid-Atlantic States [CT, DE, MA, ME, NH, NJ, NY, RI, VT]RI, VT]

– West Coast Governor’s Initiative (WGA)West Coast Governor’s Initiative (WGA) 3 States [CA,OR,WA]3 States [CA,OR,WA]

– Western Governor’s Clean Energy DirectiveWestern Governor’s Clean Energy Directive 18 Western States [AK, AZ, CA, CO, HI, ID, KS, MT, NE, ND, 18 Western States [AK, AZ, CA, CO, HI, ID, KS, MT, NE, ND,

NM, NV, OR, SD, TX, UT, WA, WY]NM, NV, OR, SD, TX, UT, WA, WY] 150+ Mayors calling for action on climate change.150+ Mayors calling for action on climate change.

Source: Pew Climate Issue Brief. Learning from State Action on Climate Change. December 2004

State Policy Drivers State Policy Drivers (cont.)(cont.)

Renewable Portfolio StandardsRenewable Portfolio Standards– 19 States [AZ, CA, CO, CT, DC, HI, IA, MA, MD, 19 States [AZ, CA, CO, CT, DC, HI, IA, MA, MD,

ME, MN, NJ, NM, NV, NY, PA, RI, TX, WI]ME, MN, NJ, NM, NV, NY, PA, RI, TX, WI] Public Benefit FundsPublic Benefit Funds

– 15 States [CA, CT, DE, IL, ME, MA, MN, MT, NJ, 15 States [CA, CT, DE, IL, ME, MA, MN, MT, NJ, NY, OH, OR, PA, RI, WI]NY, OH, OR, PA, RI, WI]

Other examples:Other examples:– MN Biofuels MandateMN Biofuels Mandate

– CARB ruling on COCARB ruling on CO22 transport emission transport emission reductions (Pavley Bill)reductions (Pavley Bill)

Pending State Biofuel Legislation: Pending State Biofuel Legislation: Pacific NorthwestPacific Northwest

(not inclusive)(not inclusive)

– Washington:Washington: HB 1645HB 1645 – Provides incentives for use of clean- – Provides incentives for use of clean-

burning alternative fuels and equipment used in burning alternative fuels and equipment used in student transportation programsstudent transportation programs

– Montana:Montana: HB 464HB 464 – Expand production and use of ethanol – Expand production and use of ethanol HB 489HB 489 – Enhance ethanol education – Enhance ethanol education SB 293SB 293 – Revise laws related to ethanol – Revise laws related to ethanol SB 144SB 144 – Require ethanol blended gasoline by 2007 – Require ethanol blended gasoline by 2007

(awaiting action in the House)(awaiting action in the House) SB 256SB 256 – Establish uniform net metering standards – Establish uniform net metering standards

GEC Role:GEC Role: Work for expanded ethanol production across the Work for expanded ethanol production across the

countrycountry Help get out environmental, economic, and Help get out environmental, economic, and

energy security facts about ethanol.energy security facts about ethanol. Have GEC Governors from across the country Have GEC Governors from across the country

speak out about successes and benefits.speak out about successes and benefits. Advocate hybrids, so biofuels can play a larger Advocate hybrids, so biofuels can play a larger

role.role. Make the connection:Make the connection: Ethanol provides Ethanol provides

environmental, health, and energy benefits for environmental, health, and energy benefits for Americans- it is not just a “farm state” issueAmericans- it is not just a “farm state” issue

For more information For more information ContactContact::

Carol Werner Carol Werner

(202) 662-1881(202) 662-1881

cwerner@eesi.orgcwerner@eesi.org

Alexandra MorelAlexandra Morel

(202) 662-1885(202) 662-1885

amorel@eesi.orgamorel@eesi.org