CEC Fashions $1B Alternative Fuel Plan

By Published On: July 11, 2008

State regulators would spend $900 million over the next seven years to advance alternative fuels for transportation and cut greenhouse gas emissions under a draft blueprint. “We’ve got a problem facing us in California, the U.S., and the world,” said California Energy Commissioner James Boyd. “The price you pay at the pump today.” The proposed California Energy Commission plan envisions public subsidies for renewable and alternative fuel stations and rebates to motorists who buy cars, buses, and trucks that run on ethanol, natural gas, and electricity. It also would fund a state strategic renewable fuel reserve to build demand and stabilize the price of ethanol, biodiesel, and potentially other motor fuels. The commission is developing the plan to guide the state’s use of money raised from new fees on motorists levied under AB 118, enacted last year. The fees are projected to bring the state $120 million a year to spend on renewable and alternative fuels for transportation. The commission is trying to figure out how to best spend the money at the same time the California Air Resources Board is struggling to draft a low carbon fuel standard to cut greenhouse gas emissions from vehicle use by 10 percent. To support that goal, the spending plan must target a mix of fuels that will complement the low carbon standard even though its development has been mired in uncertainties about whether biofuels–particularly corn-based ethanol–actually reduce greenhouse gas emissions. The uncertainty centers around trying to account for changes in land use required to grow large volumes of crops to make ethanol and biodiesel. Clearing land by burning or cutting down existing vegetation releases carbon dioxide to the atmosphere. “This will be somewhat of a balancing act,” said Peter Ward, CEC program manager. The spending plan not only will seek to cut carbon emissions, but also dependence on oil, and to promote in-state production of biofuels in California. One of the keys will be “addressing the issue of sustainability,” said Mike Smith, CEC program manager. Sustainability generally is understood to mean that production of a product is carried out in a way that does not deplete or spoil resources. However, members of an advisory committee reviewing the plan July 9 were critical. “When we transform food stock to fuel we’re probably having a negative effect on greenhouse gas emissions,” said Jim Sweeney, Stanford University Precourt Institute for Energy Efficiency director. He urged the commission not to include any subsidies for ethanol made from food crops in the plan. The commission expects to finish the plan in October, in advance of when the Air Board is expected to adopt its low carbon fuel standard. CEC is developing a separate set of rules governing how the AB 118 money is awarded and administered. Editor’s Note: For a more detailed report, please see our sister publication, Energy Meets Climate Challenge, E=MC2. It can be found at energymeetsclimate.com

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