Clean Fuel Programs for the USA

While one of the primary goals of CFDC is to increase ethanol production and use, we also work to support many of the other clean alternatives to gasoline. Each fuel is different and has its own strengths and weaknesses, but all can be important to the future.

By encouraging the production and use of domestic fuels and the industries that surround them, we help create thousands of new jobs. Domestic fuel development also increases our energy independence, allowing us to gain more control of this country's future.

This comprehensive, common sense approach to clean fuel development has enabled CFDC to become a trusted source of objective information and analysis for industry, the U.S. Congress, state governments and regulatory bodies.

For more information on clean fuels programs browse our Publications and Current Events sections.

The New and Expanded Renewable Fuel Standard in the
Energy Independence and Security Act of 2007   

The Energy Independence and Security Act of 2007 (EISA07) expanded the renewable fuel standard for gasoline that was originally passed as part of the Energy Security Act of 2005. A full copy of the EISA07 can be found at (http://thomas.loc.gov,[H.R.6.ENR].  An overview of the major components of EISA07 compiled by the Congressional Research Service is available for download in PDF format here.

The EISA07 was passed after undergoing the scrutiny of hundreds of hours of public hearings, debates, and the completion of millions of dollars in private and government studies.  The Administration and Congress set legislation in motion that will displace nearly all of the Nation’s $1 billion dollar per day imported crude oil habit by 2030.  The Renewable Fuel Standard, which will drive new ethanol technologies and markets, and automotive technologies, is the center pieces of this historic legislation.

The U.S. currently consumes about 190 billion gallons of gasoline and diesel fuel annually to meet its transportation fuel needs.  Of this volume, about 65% or 124 billion gallons is derived from foreign sources.  – U.S. Department of Energy.

The Energy Independence and Security Act of 2007 (EISA07) addresses the most important and volatile energy issue facing our nation – the ever growing and detrimental economic, environmental and national security costs paid by our country and its citizens by continuing to rely on crude oil as a primary source of energy for transportation.  The provisions in the EISA07 will reduce crude oil categorically, imported crude oil specifically, and gasoline use emphatically.  Gasoline will be reduced in two ways.  The increase in corporate average fuel economy (CAFE) standards will eventually reduce gasoline by about 1.1 million barrels per day in new cars and inserting 36 billion gallons per year of renewable fuels like ethanol will reduce gasoline use in all cars.

There are several components of the legislation that addresses some concerns about the growing use of ethanol.  Below are a few examples of how the EISA07 created an ambitious yet cautious and fair goal for ethanol production and use.

Is 36 Billion Gallons Enough to Make a Difference?  If it is not enough to make a difference it sure is enough to make a point.

• The U.S. imports about 17.5 BGPY of gasoline and gasoline blending components.  Maybe doubling the supply of finished transportation entering our country will drive own some gasoline prices?
  
  
• To simplify and make a comparison, in 2006 the United States imported 33.9 billion gallons per year (BGPY) from the Persian Gulf -- the worlds’ largest proven reserves of crude oil and home of multiple and long term diplomatic conflicts (e.g., 8.4 BGPY from Iraq, 1.3 Libya BGPY, 21.7 BGPY from Venezuela just to name a few).
  
  
• While the U.S. has already addressed Iranian crude oil imports with sanctions, when the energy security contribution of CAFE increases by automakers are added to the expanded RFS, the RFS/CAFE crude oil reductions may exceed Iran’s contribution to the world crude oil energy supply.

The Government is Not Picking Winners

• Two subcategories have been added to the national Renewable Fuel Standard. The first is Advanced Biofuels, which is defined as any renewable fuel other than ethanol derived from corn starch that meets lifecycle greenhouse gas emissions at least 50 percent less than the baseline.
  
  
• The RFS is not limited to ethanol as it includes biomass-based diesel, biogas, butanol, and other alcohols and other fuels derived from cellulosic biomass. The new law also does not allow many of the coal-to-liquid or other petroleum-based technologies to slip in under the “renewable” definition.   It also does not stop their development.  Everyone gets a fair shot at this new clean fuels market and developing new technologies – including oil companies.

Ethanol Should Have a Positive Energy Balance and Reduce Greenhouse Gases

• While the majority of recent studies show modern ethanol plants have a positive energy balance, the new law makes sure of it.  A second category in the RFS is called Cellulosic Biofuels is defined as a renewable fuel from cellulose reduces the lifecycle greenhouse gas emission (i.e., energy use) of 60 percent less than the baseline.  The baseline will be created on a comparison to gasoline or diesel fuels sold in the year 2005.  Gasoline production does not have a positive energy balance, so the hurdle for renewable fuels will be higher than the current standard.
  
  
• The legislation creates a new grant program for the research and production of advanced biofuels and programs as well as extra incentives to reduce fossil fuel energy consumption in ethanol plants. 

Protecting Food Supplies: Food vs. Fuel Production

• The EISA07 caps the amount of corn that can be used for ethanol at 15 billion gallons beginning in the year 2015.  There is also considerable amount of attention paid to studying the impacts on virtually every sector of the economy, including food production and prices, as a result of complying with the new RFS legislation.
  
• The EISA07 also contains several economic and environmental safeguards (e.g., RFS waivers and suspensions) should the government feel the need to reduce the RFS requirement based on their requirements to continually study the impact of increased ethanol/cellulose/renewable fuel production and use. 

Consumer Protection & Increased Market Competition

• EISA07 prohibits major oil companies from restricting the sale of renewable fuels in gasoline retail “franchise agreements.” This part of the law prohibits the restriction of installing retail renewable fuel dispensers, converting existing gasoline tanks or pumps to renewable fuel blends, advertising renewable fuels, purchasing renewable fuels from persons other than the franchiser, listing renewable fuel availability on signs or dispensers, and allowing the use of credit card payment.
  
• The law also allows a franchisee (gasoline retailer) to remove one grade of gasoline, even if three are required by the franchise (major oil company) contract.  This allowance is extremely important as many new E85 distributors would need to replace either premium or mid-grade with E85.

True Alternative Fuels Not Just a Gasoline Blend

• The law requires the Department of Energy to issue a report within 24 months on the feasibility of requiring E85 fuel dispensers in regions where Flexible Fuel Vehicles (i.e., FFVs, or vehicles that can burn up to 85 volume percent of ethanol) comprise at least 15 percent of all motor vehicles.
  
  
• The EISA07 requires the government to perform an ethanol pipeline study and implement a number of other small programs that will address and solve retail, technical, and marketing issues relating to marketing and distribution of ethanol and E85.

Increased Production and Use of Alternative/Flexible Fuel Vehicles

• Our government even had the foresight to extend the corporate average fuel economy credits (i.e., CAFE credits) designed to help automakers produce and sell Flexible Fuel vehicles (FFVs). This is a declining credit beginning in the year 2014 and remains in effect through 2019.  While some organizations have historically criticized “CAFE credit” for FFVs, this credit is single-handedly responsible for adding the six million FFVs that are on the road today.   As a result of those CAFE credits, U.S. automakers have already pledged to make 50% of their vehicles FFVs by 2012.  Existing and new FFVs will provide crucial support for a nation trying to meet new RFS requirements and consumers demanding relief from crude oil imports.
  
  
• The EISA07 also contains some progressive “petroleum reduction requirements” (i.e., crude oil) for federal government agencies, most of which could be met by biofuels in hundreds of fleets across the country.

The Energy Independence and Security Act of 2007 Renewable Fuel Standard
(Billion Gallons Per Year)

There is also the first ever renewable diesel requirement under the following schedule:

For more information:
http://blog.cleanfuelsdc.org/2008/01/happy-new-energ.html