Biofuels: Background and

1

• Biofuels Background and
• State Policy Context
• Center for Environmental Law and Policy
• University of California School of Law
• Berkeley, California
• April 26, 2007
• James D. Boyd
• Commissioner and Vice Chair
• California Energy Commission

2
Biofuels Have Strategic Value

• California has large, untapped biomass resources
  which can support greater use in electric power,
  biofuels, biogas and other valuable
  co-products.
• Biomass is a renewable resource capable of
  solving a portion of Californias waste disposal
  and environmental problems, while meeting state
  renewable energy goals.
• Biofuels can achieve multiple state policy
  objectives of ensuring adequate fuel supply, fuel
  diversity, energy security and greenhouse gas
  reduction.
• Other non-priced public benefits of using waste
  residues for fuel production, include improving
  forest health, human and animal health, and
  environmental protection, while creating local
  jobs and economic benefits.
• Removal of woody biomass materials from
  California's forests can reduce the frequency and
  intensity of forest fires.

3
Fuel Supply Context

• California is about 95 percent petroleum
  dependent for people and goods movement.
• California consumed over 900 million gallons per
  year of ethanol and over 14 million gallons of
  biodiesel fuel in 2006.
• There are multiple pathways to convert biomass
  residues to transportation fuels.
• Californias biomass resources can support 2
  billion gallons per year and up to 3 billion
  gallons per year of biofuels by 2020.
• Biomass-based fuels can contribute to reducing
  our states petroleum dependence, while
  decreasing air pollution and greenhouse gases.

4
Growing Transportation Fuel Demand
5
Transportation Fuels Demand
6
Alternative Fuels Demand
7
Governors Executive Order S-06-06

• On April 25, 2006, the Governor issued an
  Executive Order, establishing targets to
  increase in-state production and use of
  bioenergy, including ethanol and bio-diesel fuels
  made from renewable resources
• For biofuels, the state shall produce a minimum
  of 20 percent of its biofuels within California
  by 2010, 40 percent by 2020, and 75 percent by
  2050.
• For biomass for electricity, the state meet a 20
  percent target within the established state goals
  for renewable generation for 2010 and 2020.

8
Governor Directs State Agencies to Expand
Biofuels to Fight High Gasoline Prices

• It is critical that we do everything we can to
  reduce our dependence on petroleum based fuels.
  
• Turning waste products into energy is good for
  the economy, local job creation and our
  environment.
• ---Governor Schwarzenegger
• Sacramento, California
• April 25, 2006

9
Bioenergy Action Plan

• In July 2006, and in response to his Executive
  Order, the Governor publicly released
  Californias Bioenergy Action Plan in order to
• Coordinate research, development, demonstration,
  and commercialization efforts across federal and
  state agencies.
• Align existing state regulatory requirements to
  encourage production and use of Californias
  biomass resources.
• Facilitate California as a market leader in
  technology innovation and market development
• Encourage market entry for new applications of
  bioenergy, including electricity, biogas, and
  biofuels.
• Maximize the contributions of bioenergy toward
  achieving multiple state policy goals of
  petroleum reduction, climate change, renewable
  energy, and environmental protection.

10
Bioenergy Interagency Working Group

• Membership California Energy Commission
  (Chair), California Public Utilities Commission,
  Department of Food and Agriculture, Air Resources
  Board, Department of Forestry and Fire
  Protection, State Water Resources Control Board
  and the California Integrated Waste Management
  Board.
• Goals
• Identify opportunities to advance biopower,
  biogas and biofuels
• Address regulatory and institutional barriers and
  propose solutions
• Create synergy and consistency through joint,
  state level efforts.
• Timing Consultant report titled Recommendations
  for a Bioenergy Plan for California, was released
  in April 2006 the Working Group meets regularly
  to comply with the Governors Executive Order
  S-06-06.

11
AB 1007 Alternative Fuels Plan

• State plan to increase the use of alternative
  transportation fuelsthe AB 1007 Alternative
  Fuels Plan
• Energy Commission will prepare a plan to reduce
  petroleum use
• Plan does not pick technology winners and
  losers.
• Plan will provides a comprehensive framework for
  the state to ensure that all fuel and technology
  options are given an opportunity to compete in
  the California transportation market.
• Plan Scope
• Evaluate fuels on full fuel-cycle assessment of
  emissions
• Set goals for 2012, 2017, 2022 for increased use
  of alternative fuels
• Recommend policies to ensure alternative fuel
  goals are attained, including
• Fuel and vehicle standards
• Requirements and incentives to ensure vehicles
  use alternative fuels
• Requirements and incentives to ensure fueling
  stations are available
• Incentives and other encouragement for
  alternative fuel-capable vehicles, including
  Research, Development and Demonstration projects.

12
Global Warming Solutions Act of 2006

• On September 27, 2006, the Governor signed
  landmark legislation, Assembly Bill 32, the
  Global Warming Solutions Act of 2006.
• Californias initiative is intended to limit
  greenhouse gas emissions from the states largest
  emitting sectors.
• This landmark legislation, gives the California
  Air Resources Board significant, new
  responsibilities to
• Adopt a statewide greenhouse gas (GHG) emissions
  limit
• Adopt regulations to achieve maximum feasible
  and cost-effective GHG reductions
• Adopt market mechanisms, such as cap-and-trade
  programs
• Establish mandatory reporting of GHG emissions by
  large emitting sectors and industries.
• Adopt a series of discrete early action
  measures to provide more immediate GHG
  reductions and which will become effective in
  January 1, 2010.

13
Low Carbon Fuel Standard

• On January 9, 2007, the Governor issued his
  Executive Order S-1-07, establishing the worlds
  first Low Carbon Fuel Standard for transportation
  fuels.
• Under this proposal, petroleum refiners, gasoline
  seller and fuel suppliers must reduce the carbon
  content of their fuels by 10 percent by 2020.
• By regulating carbon fuel content, this standard
  will support the states greenhouse gas reduction
  targets, while promoting the use of alternative
  fuels.
• Adding ethanol or other biofuels into gasoline is
  one option for meeting the Standard other
  alternative and non-petroleum fuels, including
  electricity and hydrogen, will be part of the
  fuels mix.
• The ARB will adopt this Standard as an early
  action measure as required by Assembly Bill 32
  in late 2008. Alex Farrell of UC Berkeley and
  Dan Sperling of UC Davis are leading a team to
  recommend a framework for the Standard.

14
Summary and Conclusions

• There is no silver bullet in our future, but
  rather a portfolio of low-carbon and alternative
  transportation fuels (silver buckshot) will be
  needed to meet the growing demand.
• We expect the transition from a mono-fuel to a
  poly-fuel market to continue, as a result of
  state and national policy initiatives and
  considerable interest by private venture
  capitalists in financing biofuels production
  facilities.
• In California, ethanol as a gasoline blend will
  continue to grow in the short term (in the form
  of E5.7 and E10 blends). Over the longer term,
  E85 will require additional investment in fueling
  infrastructure, overcoming the food versus fuel
  competition, addressing multi-media impacts, and
  achieving price parity with gasoline.
• Biodiesel produced from a variety of feedstocks
  can become a viable substitute for conventional
  diesel fuel however, the life cyle costs and
  benefits will vary by feedstock and conversion
  technology (as Alex Farrell will explain more
  fully).
• State policy initiatives, including the Bioenergy
  Action Plan, the Global Warming Solutions Act,
  and the Low Carbon Fuel Standard, all support a
  viable alternative fuels market.