biofuels 2009 presentation
DESCRIPTION
A presentation to the Advisory Group covering technologies, emissions, economics and incentives related to biofuels, including ethanol and biodiesel.TRANSCRIPT
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS - Primer
• Biofuel – Ethanol– Made from almost any grain
• Critics and competition with food – Process
• Feedstock, enzymes, heat = ethanol plus waste for mulch/animal feed– Excitement
• Cellulosic and biomass – avoid competition with food sources– Corn stubble, corn cobs, wood chips, straw – Included in national RFS but not commercially proven
– Lone oxygenate for EPA CAA • Replaces MTBE• NAAQS intermittently require E10
– Under the radar• Miscanthus
– Order of magnitude more efficient than corn– Not edible, higher yields/less land, marginal soil, broader climate range
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS - PrimerEthanol Production by Feedstock, 2006
Plant FeedstockCapacity (million
galllons/year) % of Capacity No. of Plants % of Plants
Corna 4,516 92.7% 85 83.3%
Corn/Grain Sorghum 162 3.3% 5 4.9%
Corn/Wheat 90 1.8% 2 2.0%
Corn/Barley 40 0.8% 1 1.0%
Milo/Wheat 40 0.8% 1 1.0%
Waste Beverageb 16 0.3% 5 4.9%
Cheese Whey 8 0.2% 2 2.0%
Sugars & Starches 2 0.0% 1 1.0%
Total 4,872 100.0% 102 100.0%
Source:
Environmental Protection Agency, Office of Transportation and Air Quality "Renewable Fuel Standard Program - Draft Regulatory Impact Analysis," September 2006, EPA420-D-06-008.
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS - Primer
Feedstock as Percentage
0%
20%
40%
60%
80%
100%
Corn Corn/GrainSorghum
Corn/Wheat Corn/Barley Milo/Wheat WasteBeverage
CheeseWhey
Sugars &Starches
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS - Primer
• Biodiesel– Made from vegetable or animal fats
• Soy (80%), rapeseed, some canola
• Virgin– Competition with food arguments
• Waste– Used fryer grease (18%), must be filtered first, limited supply
– Process – Transesterfication
• Oil or fats react with alcohol in presence of catalyst to yield mono-alkyl-esters
• Waste used as mulch, animal feed
– Excitement
• Algae - Carter administration, huge potential spurring VC, not commercial ready
• Final ASTM Standards for B5 – B20 recently released
– Under the radar
• Camalina– Non-edible, marginal lands, less water/fertilizer
– Used in bio-jet-fuel demonstration
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Energy Density
FUEL BTU (based on volume)
Diesel (No. 2) 129,500
B2 129,276
B20 127,259
Gasoline (mid-grade/premium) 125,000
B100 118,296
Gasoline (clear) 115,000
E10 111,500
E85 81,800
E100 75,700
CNG (3600psi) 38,000
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Energy Density
BTU by Volume
020,00040,00060,00080,000
100,000120,000140,000
Diesel(No. 2)
B2 B20 Gasoline B100 Gasoline(clear)
E10 E85 E100 CNG(3600psi)
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Energy Density
• Caveats – LHV and HHV
– Winter and Summer
– Quality variations among Producers and Suppliers
Translation into “vehicle range”
– Driving conditions
• Road conditions
• Headwinds
• Hills
• Traffic congestion
– Vehicle Conditions
• Engine efficiency
• Tire pressure
• Roll resistance
• Wheel alignment
– Driving habits
• Acceleration
• Cruising speed
• Air conditioning /defroster
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Emissions
Fuel gCO2e/MJ Source
Coal (scrubbed) 266.66 Nature reports (10/2008)
Natural Gas 123.05 Nature reports
Midwest 20% dry mill, 20% wet mill, dry distiller grains
99.40 Ethanol Producer Magazine (04/2009)- Citing CARB’s LCFS calculations
Diesel 97.28 ICBE and ODOE
Gasoline 95.86 Ethanol Producer Magazine (04/2009)
Oregon E10 using local ethanol 93.49 ODOE
California dry mill, wet distiller grain, biomass
77.40 Ethanol Producer Magazine (04/2009)
Brazilian sugarcane 73.40 Ethanol Producer Magazine (04/2009)
B20 71.28 ICBE and EPA
Oregon dry mill, dry distiller grain, natural gas
67.60 ODOE
Oregon dry mill, wet distiller grain, natural gas
49.90 ODOE
Nuclear 18.33 Nature reports (10/2008)
PV 8.33 Nature reports (10/2008)
Wind 2.77 Nature reports (10/2008)
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Emissions gCO2e/MJ Comparison
Well to Wheel
0
50
100
150
200
250
300
Coal NaturalGas
MidwestMill
Diesel Gasoline OregonE10
CaliforniaMill
Brazil B20 Oregon#1
Oregon#2
Nuclear PV Wind
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
Biofuels – Note on gCO2e
• CO2e and Global Warming Potential (GWP)– CO2 1
– CH4 21
– N2O 310
– SF6 23,900
• Biodiesel– Greatly reduces CO
– EPA assumes CO2 emitted in WTT is reabsorbed
• CARB LCFS calculations are controversial
– NOx increases slightly, but with greater GWP
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Incentives
• Federal– State
• Funding to assist states develop and maintain emission reduction programs, including grants for clean bus fuel and technology
• Funding to help states develop RE and energy efficiency programs• Funding for the Clean Cities program
– Retailers and Suppliers• Tax credit for cost of installing alternative fueling equipment• Tax credit for Small Ethanol Producer (60mm gal) and cellulosic biofuel producer • Tax credit for blending ethanol and biodiesel • USDA Section 9006/9008 funding for rural renewable energy systems and R&D• Funding for biomass proof of concepts and R&D• Funding for community-based producer planning or working capital• Funding for public transportation in parks and commercial airport ground equipment• Improved Energy Technology loan guarantees
– Consumers• Tax credit for cost of installing alternative fueling equipment
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Incentives
• State– Retailers and Suppliers
• Zoning exceptions for on-farm biofuel production
• Tax credit for feedstock collectors and producers
• Property tax credit for biofuel producers
• BETC for alternative fuel production and fueling infrastructure
• Energy Loan Program (SELP)
– Consumers
• Tax credit for purchase of biofuels
• RETC for alternative fuel vehicles and infrastructure
• SELP
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Mandates
• Federal– Require percentage of federal fleets to be alternative fuel vehicles (AFV)
• DOE in rulemaking process determining if local government and private fleets must do the same
– Incremental costs of AFV spread across entire fleet
– Renewable fuel standard for federal fleets
• Reduce petrol use by 2% per year
• Increase alternative fuel use by 10% per year
– Renewable Fuel Standard
• EPA rule set it at 7.76% for 2008 (9 billion gallons)
• 15 billion by 2015
• 36 billion gallons required by 2022
• 30% by 2030
• Beginning in 2013, certain percentage must be biomass / cellulosic
• 2mm FFV on road today, very small percentage
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Mandates
• State– Agency fleets and transit districts must purchase AFVs and use alternative fuels
• Except when not economically of logistically feasible – Renewable Fuel Standard
• E10 ethanol after production reaches 40mm gallons • B2 biodiesel after production reaches 5mm gallons
– B2 is considered an additive • B5 after production reaches 15mm gallons• Production capacity surpassed thresholds as of September, 2008
– Ethanol 297mm– Biodiesel 27mm
• Air and maritime exceptions– Airlines voluntarily pursuing petrol blended with biodiesel
• City of Portland– City vehicles must use at least E10 or B20, FFV must use E85– Solid waste collectors must use B20– All gas sold must be E10– All diesel sold must be B5 (B10 by July, 2010)
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Retailers
• Cost of Converting (E85)– Profit margins have decreased $0.005/gal/year since 1994– Average: 3.3 tanks @ 12,000 gallons each
• Assume 2 regular, 1 premium• Truck stops along shipping corridors have higher percentage of diesel tanks
– Once a tank is blended, can’t go back, must be permanently marked– Biofuels require dedicated blended tank, can’t blend with petrol through pump
• Blending equipment not UL approved yet• Requires zoning variances or fire marshall exceptions• Ethanol becomes more dense in quantity affecting weights and measures
– Profit margins justifying voluntary conversion are driven by throughput, not conversion cost
• though conversion cost could be psychological barrier– Option: take out the premium grade fuel tank
• Premium is higher margin fuel, but throughput has been decreasing• Replace premium tank with biofuel removes medium and high grade • Presents less options to customers – regular and biofuel
– Option: take out 1 regular grade fuel tank• Now have less volume of higher throughput fuel grade
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Retailers
• Market Experiences– Since throughput is the most important factor
• Sufficient local demand must exist– Tax incentives, fleet vehicles, government mandates
• Customers require information about their choices– Ethanol vs. driving habits re: mpg and range
– Petrol vs. Ethanol price differential of 20% maximizes profit margin• Influenced by price of petrol and dependable, long term, favorably priced,
local wholesale supply of ethanol– Pricing Ethanol:
• Retail gas price -> use as starting point• E85 retail price -> subtract 20%
– Profit margin -> $0.10 - $0.30 per gallon» Taxes -> reduced
property and income tax» Transportation to retailer -> local vs. distant» E85 wholesale price -> feedstock price - influenced
by RFS and incentives
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Consumers
• Need OEM options– FFV, diesel, serial PHEVs with diesel or FFV ICEs
• Magnusson-Moss Act – manufacturers must warrant materials and workmanship of vehicles. If engine problems are caused by a fuel, such problems are not related to the materials or workmanship of the engine, but are the responsibility of the fuel supplier and not the engine manufacturer.– Hence the excitement over the ASTM B5 – B20 standards making it easier to
avoid dirty biodiesel
– But, still unclear whether B5 or higher blends degrades modern diesel emission equipment
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Points of Interest
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Points of Interest
• Rural Areas• Power source• Steady biodiesel supply/demand• Overlapping state/fed incentives• Low fuel transportation costs• Double as EVCN
• transmission constrained rural areas• Urban Areas
• Standby or peaker power source• Peaker power source for am/pm EV commute
• State government • Standby power already required to go biodiesel
• Caveat• More efficient if combined cycle
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Review Executive Order
• Applicable to Biofuels– EO #5
• compile, review, evaluate market and policy research
• review current and future opportunities for leadership and growth
– EO #7.c
• develop plan to work with private sector to build/maintain alt fuel stations
• assist in public awareness campaign
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Recommendations
• Vehicles– PHEV
• ICE in serial PHEV running on biofuels• Scale state incentives based on technology
– EV• Biodiesel charging stations in rural areas
– Heavy-duty • I-5 truck stops providing higher biodiesel blends
• Fuel– Implement RFS now– Raise biodiesel blend requirement from B5 to B20– Support retailers by requiring gov fleet vehicles to fuel at local, not state, fueling stations
• Tax– Manipulate price differential between petrol and biofuel with gas tax that decreases as
cost of petrol goes up• Feedstock
– Incentivize Miscanthus and Camelina
Governor's Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
BIOFUELS – Recommendations
• Biodiesel – New ASTM standards make product more reliable
– Superior BTU to emissions ratio compared to all other fuels
– Unfortunately, existing fleet is mostly gas, not diesel
– Incentivize new PHEV ICE’s to be serial and diesel (but see E85 below)
– Easier to blend at pump with forthcoming UL certification of parts
– Educate, invoke OR RFS mandate and encourage broader use at
• Diesel truck stops
• Backup power
• Rural EVCNs as range extenders for EVs in transmission constrained areas
• Biofuel – Ethanol– Lower energy content may not be a concern in serial PHEV ICE
– Educate and assist retailers overcome poor blending attributes