Could the United States cut its energy costs and reduce greenhouse gas emissions by providing incentives for the use of low-carbon fuels – while still allowing everyone to use whichever fuels they want?
The National Low-Carbon Fuel Standard Project says a policy encouraging the use of electricity, hydrogen, and biomass feedstock for transportation fuels would be feasible, timely, and eminently justified.
Three years have passed since a congressional proposal to establish an LCFS died on the vine. But the LCFS Project hopes its new report proposing an LCFS framework will elicit fresh interest in a comprehensive response to mobile-source emissions of GHGs.
The report was released on July 18. It argues that the innovation and fuel-substitution sparked by an LCFS would save $411 billion in U.S. energy expenditures by 2035. It also argues that the scope of an LCFS would reduce GHG emissions more effectively than the existing, renewable fuels standard, alone.
That standard requires an increase in biofuels production over time. But RFS2 is under “more intense scrutiny” on Capitol Hill because “there’s a growing sense that it needs improvement,” LCFS Project co-director Daniel Sperling told Breaking Energy.
Read a contributed post from the authors of the report on Breaking Energy here.
RFS2, Sperling continued, “is seen as a mandate that ‘picks the winners,’ so it doesn’t simulate innovation and technological development. I would suggest that that the LCFS responds to most of the issues RFS2 is raising on the Hill.”
Sperling is also director of the Institute of Transportation Studies at the University of California (Davis). He had previously coordinated his state’s initiative to draft an LCFS, which was adopted by the state’s Air Resources Board in 2007 and is still in the implementation stage.
California remains the only state with an LCFS; the European Union and British Columbia have adopted LCFS policies, as well.
In Congress, California Democrat Henry Waxman tried to include an LCFS in the American Clean Energy & Security Act of 2009, which was notable for the “cap and trade” mechanism among its climate change provisions. But the Energy and Commerce Committee reported the bill to the full House without the Waxman language, Sara Chieffo, legislative director at the League of Conservation Voters, told Breaking Energy.
The bill eventually died in the Senate. And, though it’s unclear if the EPA actually needs enabling legislation to regulate carbon emissions from transportation fuels, it’s entirely possible that a legislative LCFS proposal will re-emerge, anyway.
Chieffo declined to handicap the prospects for LCFS legislation in the next Congress, whose political majorities are up for grabs. But she argued that “it’s not an exaggeration to say that the current House is the most anti-environmental chamber in U.S. history.
“In the area of climate change,” Chieffo continued, “the House has voted repeatedly to block EPA from regulating carbon emissions, even though their legal authority to do so has been affirmed by the Roberts Supreme Court.”
Chieffo notes that there are “many mechanisms” available to curb carbon emissions, but scaling back the carbon intensity of transportation fuels “is especially important,” she said, “because they account for 80% of our oil dependence and a third of our annual carbon emissions. So, addressing that sector is a critical piece of any comprehensive climate change legislation.”
The LCFS Project is a collaboration of researchers from the University of California, the Oak Ridge National Laboratory, the International Food Policy Research Institute, Carnegie Mellon, and the Universities of the states of Illinois, California (Davis) and Maine.
Under its proposed framework, energy companies would be required to reduce their fuels’ average carbon intensity, which is measured as grams of CO2 per mega-joule of fuel energy.
The CI for each fuel would be calculated on a life-cycle basis, which means that all the energy expended to produce and distribute a fuel would be included in the measurement of its carbon footprint. And, “if you can decrease emissions anywhere along the life cycle, you would get a credit for it,” Sperling said.
For example, “some corn ethanol producers are starting to use cellulose from cobs and leaves, and anything they do to reduce their carbon footprint anywhere along the life cycle would result in credits,” Sperling pointed out.
Credits generated through the program could be purchased by companies that want to quickly reduce the average CI of their fuels, with the LCFS goal for gasoline and diesel being a 10%-to-15% reduction by 2030.
Companies could also reduce their fuels’ CI by producing them from lower-CI feedstocks, diversifying into electricity or hydrogen production, or purchasing electric vehicles for company fleets.
The Technical Details:
The Project’s Technical Analysis report says that RFS2 alone would reduce GHG emissions by about 5% by 2035, but adds, “This reduction falls to 3.6% … after including an international land-use-change emissions factor to account for increased emissions from diverting land to energy production.”
That initial 5% “further declines to 1.1% after including the global rebound effect, meaning the additional gasoline consumption around the world that results from lower U.S. gasoline consumption slightly reducing world oil prices,” the technical analysis adds.
But “implementing an LCFS policy alongside RFS2 would achieve an additional 3.4% reduction in GHG emissions” even after accounting for land-use changes, the report projects.
Other LCFS Project recommendations include: ensuring that the regulated community can “bank” as well as purchase carbon credits; adopting complementary policies to surmount any hurdles impeding the introduction of non-petroleum fuels; and devising incentives for refiners to buy lower-CI crude oil without discriminating against oil sands exported by Canada.