The Clean Cities ProgramThe Clean Cities Program2008 Update2008 Update

Program Priorities, Budgets & Legislation, Program Priorities, Budgets & Legislation, Biofuels Updates, Future Areas of EmphasisBiofuels Updates, Future Areas of Emphasis

Mike ScarpinoU.S. Department of Energy

National Energy Technology Laboratory

The Clean Cities ProgramThe Clean Cities Program

• Established in 1993 in response to the Energy Policy Act (EPAct) of 1992

• Provides a framework for businesses and governments to work together as a coalition

• Coordinates the activities of petroleum displacement proponents

• Mission: To advance the energy, economic and environmental security of the United States by supporting local decisions to adopt practices that reduce the use of petroleum in the transportation sector.

• Goal: To expand and stimulate alternative fuel and advanced technology markets to achieve a petroleum reduction of 2.5 billion gallons of gasoline equivalent (GGEs) / year by 2020.

Clean Cities TodayClean Cities Today

87 Coalitions 5,452 Stakeholders 5,753 AFV Stations 500,000 AFVs using Alt Fuels

Clean Cities Technologies Clean Cities Technologies (Fuel/Technology Neutral Approach)(Fuel/Technology Neutral Approach)

Alternative FuelsIncrease Vehicles and Infrastructure• Electricity• Ethanol (E-85)• Propane• Natural Gas• Hydrogen• Biodiesel (B100)

Blended FuelsIncrease Use of Blends

• Low levels of alternative fuels with conventional fuels – 10% ethanol / 90% gasoline blends (E10) – 2% biodiesel / 98% diesel blends (B2)– 20% biodiesel / 80% diesel blends (B20)

Idle ReductionIncrease Technology Use/Practices

• Heavy-duty trucks• School Buses

HybridsExpand Market for Vehicles

• Light- and heavy-duty hybrid electric vehicles

Fuel EconomyIncrease Fuel Efficient Technologies

and Practices

• Fuel efficient vehicles, behavioral changes, vehicle maintenance initiatives, etc.

Red

uce R

eplaceEliminate

Clean Cities Program Focus AreasClean Cities Program Focus Areas

1.1. Accelerated Biofuels Initiative-Accelerated Biofuels Initiative- Accelerate BioFuels Infrastructure Development Efforts, Consumer Outreach, and Technical Support Efforts.

2.2. Technology Deployment & Demonstrations-Technology Deployment & Demonstrations- Niche Market Fleet, Adv Vehicle Demos (PHEVs, HD HEVs, FCVs, Clean diesel)

3.3. Consumer Information & Education-Consumer Information & Education- Fuel Economy.Gov (General outreach activities for consumers to make educated choices for new vehicle purchases

4.4. Strengthening Coalitions-Strengthening Coalitions- Specialized training & workshops

5.5. Expanded National Partnerships-Expanded National Partnerships- Work w/ Verizon, Enterprise, Kroger, etc.

6.6. Addressing Technical Barriers & Technical Assistance for Addressing Technical Barriers & Technical Assistance for Early Adopters-Early Adopters- Coordinate specialized training and outreach to public safety officials, first responders, fleet maintenance personnel, etc. Distribute incident response procedures and guidelines. UL certifications. CNG Cylinder Program.

Clean Cities Coalitions: Public-Private PartnershipsClean Cities Coalitions: Public-Private Partnerships

• Coalition Objectives– Identify and educate fleets about alternative fuels

– Build necessary refueling sites

– Train drivers, mechanics, policymakers and others

– Educate the public

– Find adequate resources for AFV projects

– Encourage governments to pass legislation favorable to AFVs

• Fiscal incentives, e.g. taxes

• Non-fiscal incentives, e.g. green parking, HOV access

Funding:Funding:

Program Budgets &Program Budgets &Past / Future DOE SolicitationsPast / Future DOE Solicitations

Clean Cities Program BudgetClean Cities Program Budget$

Mil

lion

s

0

2

4

6

8

10

12

14

FY-00 FY-01 FY-02 FY-03 FY-04 FY-05 FY-06 FY-07 FY-08 FY-09

Appropriated Request

Clean Cities Leverages FundingClean Cities Leverages FundingGrants Awarded to Coalitions in 2006

Amount of Grants Total ValuePercentage

of Total

less than $50,000 $1,741,846 1.99 %

Between $50,000 and $100,000 $1,426,594 1.63 %

Between $100,000 and $500,000 $10,858,689 12.38 %

Between $500,000 and $1,000,000 $3,283,498 3.74 %

Over $1,000,000 $70,395,261 80.26 %

Total $87,705,888

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Potential Funding Categories for FY 09 SolicitationPotential Funding Categories for FY 09 Solicitation1. Infrastructure for Alternative Fuels:

- intend to fund a percentage of the infrastructure cost associated with developing alternative fuel fueling capability.

2. Education/Outreach & Workshops:- intended to provide technical support to help accelerate the transition to biofuels and other alternative fuels in the transportation sector. This may include the development of educational materials, direct technical assistance, and workshops on subjects such as, Vehicle/Fuel Benefits and Availability, Fuel Handling & Quality, First Responder Training, the Safe and Proper use of AFVs and refueling equipment/stations, working with local public safety and regulatory officials, etc.

3. Incremental Cost of Alternative Fuel Vehicles - intend to fund a percentage of the incremental cost associated with purchase of

dedicated alternative fuel vehicles.

4. Biofuels College/University Program- intend to fund projects to support an integrated program from curriculum through application to demonstrate production and use of biofuels on campus (vehicle fleets, heating, off-road vehicles, etc.)

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Potential Schedule for Potential Schedule for FY 09 Clean Cities Program SolicitationFY 09 Clean Cities Program Solicitation

1. NETL will have Project Management and Administrative oversight

2. Estimated Date to Issue Solicitation: late Oct / early Nov 2008

3. Estimated Due Date For Proposals: late January, 2009

4. Estimated Award Date: Spring 2009

5. Estimated Funding Available: $6 million in DOE funds over 2 year funding period (i.e. $3 million in FY 09 funds & $3 million in FY 10 funds).

Note: Some awards may be jointly funded by Clean Cities and the DOE Biomass Program (OBP). All funding estimates are contingent upon final Federal budget appropriations for FY09 and future years.

Energy Independence & Energy Independence & Security Act of 2007 (EISA)Security Act of 2007 (EISA)

Energy Independence & Security Act of 2007 Energy Independence & Security Act of 2007 (EISA)(EISA)

• December 2007, Congress Passes and President Signs the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140)– What EISA did:

• Expanded Renewable Fuel Standard (RFS) to 36B gal/yr of renewable fuel by 2022 (vs. 7.5B gal/yr by 2012, from EPAct 2005) - Corn Ethanol limited to 15B of 36B gallons in 2022 – remaining 21B gallons

is Advanced Biofuels & Biodiesel must be at least 1B gallons in 2022

• Increased Corporate Average Fuel Economy (CAFE) - Increases CAFE levels to 35 mpg overall by 2020 – estimated to save 0.9M

barrels per day by 2020, and 2M barrels per day by 2030

– What EISA did NOT do:• Create New Tax Incentives

EISA Biofuels UtilizationEISA Biofuels UtilizationSec. 244 – Renewable Fuel Infrastructure & Fueling Station Grants• Calls for DOE to administer grants for renewable fuel infrastructure

(blends of >10% up to 85% with gasoline (no cap for diesel blends)) – up to 33% of costs, up to $180,000 for any single retail outlet. No double benefit w/tax credits.

• Also allows for technical/marketing assistance. • Also includes refueling infrastructure corridor program

– up to 10 areas, – maximum of $20M/applicant, – requires involvement of EERE Vehicle Technology deployment

program participants• $200M/yr Authorization, FY2008-2014. No funds appropriated.• Authorization DOES NOT EQUAL Appropriation – just because

Congress authorizes money doesn’t mean the program gets it.

EISA – Rulemaking for EISA – Rulemaking for State & Fuel Provider ProgramState & Fuel Provider Program

• EISA Section 133 calls for DOE to allocate acquisition credits under the S&FP Program for the following:– Fuel Cell Electric Vehicles– Hybrid Electric Vehicles– Medium or Heavy duty Electric Vehicles– Neighborhood Electric Vehicles– Plug-In Electric Vehicles– Investments in AF refueling equipment or off-road equipment– Investments in emerging technologies

• DOE is required to allocate these credits by 1/31/09. This action requires a rulemaking.

• Notice of Proposed Rulemaking anticipated to be issued in summer 2008.

EISA – Renewable Fuel StandardEISA – Renewable Fuel Standard• Expands the Renewable Fuel Standard to 36B gal/yr of renewable

fuel by 2022 (vs. 7.5B gal/yr by 2012, from EPAct 2005)• Fuels include:

– Corn ethanol– Advanced biofuels

• Cellulosic ethanol and ethanol from other non-corn biomass sources

• Biomass-based Diesel (Biodiesel) • Biogas• Butanol and other alcohols from biomass• Other fuels from cellulosic biomass

• EPA will develop regulations to implement• Corn Ethanol limited to 15B of 36B gallons in 2022 – remaining 21B

gallons is Advanced Biofuels• Biodiesel must be at least 1B gallons in 2022

EISA – Corporate Average Fuel EconomyEISA – Corporate Average Fuel Economy• Increases CAFE levels to 35 mpg overall by 2020 – estimated to

save 0.9M barrels per day by 2020, and 2M barrels per day by 2030

• DOT/NHTSA to develop implementing regulations• Continues to allow separate standards for passenger cars and

light trucks• Manufacturers can still separate results for domestic and import

passenger cars • Flexible Fuel Vehicle credit continues at current 1.2mpg credit

level through 2014, then ramps down to complete phase-out after 2019

• Fines – half goes to DOT to administer CAFE program, half goes to DOT to provide grants for manufacturing conversion for advanced technologies

• Calls for development of Medium- and Heavy-Duty fuel economy standards, after completion of a National Academies of Science study

EISA – Biofuels UtilizationEISA – Biofuels Utilization• R&D on optimizing FFVs to run on ethanol• R&D on optimizing engines to run on various biodiesel blends• Specifications for biodiesel (ASTM or EPA), and enforcement

by EPA• Study on biogas R&D needs for use in NGVs• Opening up opportunities for renewable fuel infrastructure

through prohibiting restrictions in franchise agreements• Study of feasibility of requiring fuel retailers to install E85

pumps• Study of feasibility of constructing ethanol pipelines• Study adequacy of rail transport system for ethanol• Distribution infrastructure R&D

Food For Fuel:Food For Fuel:

Truths & MythsTruths & Myths

Food vs. FuelFactors Affecting Food Costs

• Higher Agricultural Commodity and Energy Prices• Growth in Foreign Demand• Reduced Foreign Competition and Supply• Depreciating U.S. Dollar• Buying of Grain and Oilseed Futures• Weather, Drought

• Less than one third of U.S. retail food contains corn as a major ingredient.

• Corn exports increased from 53.9 metric tons in 2006/2007 to 63.5 metric tons in 2007/2008.

USDA, FAS, 5/2008

• Ethanol production and availability may have positively impacted fuel costs.

• “Across all food consumed, 30% higher corn prices increase all average food prices by 1.1% percent.”

Center for Agricultural and Rural Development, Helen H. Jensen, Bruce A. Babcock, Iowa Ag Review, Summer 2007

Food vs. Fuel:Factors Affecting Food Costs

Components of Retail Food Costs

Transportation4%Energy

4%Packaging

7%

Profits4%Rent

4%

Advertising4%

Taxes4% Depreciation

4%

Interest3% Repairs

2%

Other Costs3%

Farm Value19%

Labor38%

Source: USDA

Direct energy costs and transportation costs account for roughly 8% of retail food costs in 2005.

Main Street Economist, Vol. III, Issue I; 2008; Federal Reserve Bank of Kansas City

Food vs. Fuel: Corn as Feed

• Feed Corn Usage– 2.6 lb of corn to produce 1 lb of chicken– 6.5 lb of corn to produce 1 lb of pork– 7 lb of corn to produce 1 lb of beef

• With corn at $2.28/bushel (20 year average), 56 lb/bushel or $.04/lb of corn, feed corn adds:– $.10/lb of chicken– $.26/lb of pork– $.29/lb of beef

• Using the 2007 average price of corn of $3.40 and assuming price increases would all be passed on to the consumer, prices would have increased:– $.05/lb for chicken– $.13/lb for pork– $.14/lb for beef Amber Waves, Vol. 6, Issue 1; USDA

Food vs. Fuel: Corn Products for Human Consumption

• An 18-oz box of corn flakes contains approximately 12.9-oz of milled field corn– With corn at $2.28/bushel (20 year average), 56 lb/bushel or

$.04/lb of corn, the corn value of the corn in this box is $.033.– Using the 2007 average price of corn of $3.40 and assuming price

increases will all be passed on to the consumer, prices would increase by $.016.

• A 2-liter bottle of soda contains approximated 15 oz of corn in the form of high-fructose corn syrup. – With corn at $2.28/bushel (20 year average) the value of the

corn is $.038.– Using $3.40/bushel prices would increase by $.019.

Amber Waves, Vol. 6, Issue 1, USDA

Water Usage

• 96% of field corn used for ethanol is not irrigated• Water consumption for the other 4% is approximately

1.2 acre-feet of water per acre or approximately 785 gal for every gallon of ethanol produced

• Water usage for ethanol production ranges from 3-4 gal of water per gallon of ethanol produced.

• Future cellulosic production is estimated to use 1.9-6 gal of water per gallon of ethanol

• Water usage for petroleum refining ranges between 45-50 gal consumed per barrel of crude or 2-2.5 gal per gallon of gasoline

Water Usage for Current and Future Ethanol Production, Andy Aden, National Renewable Energy Laboratory, Southwest Hydrology, 9-10/2007

Price Impact on Gasoline:Three Different Points of View

“The growth in ethanol production has caused retail gasoline prices to be $0.20 to $0.40 per gallon lower than would otherwise been the case.”

The Impact of Ethanol Production on U.S. and Regional Gasoline Prices and on the Profitability of the U.S. Oil Refinery Industry, Working Paper 08-WP 467, April 2008, Xiaodong Du and Dermot J. Hayes, Center for Agricultural and Rural Development,

Iowa State University

“Oil and gas prices would be about 15% higher if biofuel producers weren’t increasing their output.”

Francisco Blanch, Merrill Lynch, The Wall Street Journal, 3/2008

“The use of 10% ethanol blend saved Missouri drivers $.077 per gallon at the retail pump in 2007.”

Impact of Ethanol on Retail Gasoline Prices in Missouri, John M. Urbanchuk, LECG LLC, 4/2008

Conclusion: Several Global Impacts Contribute To Increasing Food Prices. A Complex Issue

Global Supply

Global Demand

Value of the Dollar

Oil Demand & Price

Buying of Grain and Oilseed Futures (i.e. commodity prices)

Increased use of Biofuels

Stakeholder & General Public Stakeholder & General Public Information and Education:Information and Education:

Tools & ServicesTools & Services

Clean Cities Website ToolsClean Cities Website Tools

Clean Cities

AFDC

FuelEconomy.gov – in partnership with EPA

Clean Cities and AFDC Website ToolsClean Cities and AFDC Website Tools• Alternative Fuel Station Locator

• Financial Opportunities

• Incentives and Laws

• Clean Fleet Guide

• Success Stories

• Current Model Listing and Listing for 2001 – 2007

• Clean Cities, Vehicle Manufacturers and Industry Contacts Listing

• Natural Gas, Hybrid, and Flex Fuel Cost Calculators

• Idle Reduction Equipment Listing and Search Options

• Searchable Document Database

• Related Links

• Vehicle Make/Model - Heavy- and Light-Duty Vehicles

Incentives and LawsIncentives and Laws

Refueling Station LocatorRefueling Station Locator

Technology BulletinsTechnology Bulletins• Technological breakthroughs, issues, and news

Data, Analysis & TrendsData, Analysis & TrendsData, Analysis & Trends

are available for:

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Provider Fleets• Federal Fleets