Wednesday, March 21, 2007

Bush Administration Proposes Alternative Fuel Standard Act - Gov. Schwarzenegger Encourages Different Approach

[From Green Car Congress:]

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 tend to agree with the Governator here. We don't need any more of a focus on corn-based ethanol which does very little to achieve the dual policy goals of reduced oil dependence and reduced global warming pollution.

I also agree that it makes little sense to promote an RFS with no attention paid to the well-to-wheels fossil energy input and greenhouse gas emissions intensity of the biofuels.

It would make much more sense to couple a low-carbon fuels standard with policies focused on increasing vehicle fuel economy (fee-bates/gas guzzler taxes and CAFE reform) than to adopt an RFS if our goal is to reduce oil consumption, mitigate climate change, or both.

[Image Credit: GE Fanuc Automation]

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