MGA Bioeconomy and Transportation Working Group Meeting

1
MGA Bioeconomy and Transportation Working Group
Meeting

• May 11 12
• Holiday Inn
• Minneapolis, MN

2
Agenda Review

• May 11, 2009
• Discussion of BTAG Policy Options Document
• Discussion of roadmap
• Review of draft scenarios using Energy Choice
  model

3
Agenda Review

• May 12, 2009
• Implementation discussions
• Federal Biomass Policy
• Low Carbon Fuels Standards
• Transportation Policy
• Wrap up and next steps

4
Ground Rules

• It is your show
• Everyone is equal
• No relevant topic is excluded
• No discussion is ended
• Respect opinions
• Respect time
• Group decision-making
• No attribution

5
BTAG Policy Options Document
6
POD Objectives

• Raise any major barriers to consensus and resolve
• Discuss and resolve sticky issues already
  identified
• Reach agreement to lay the document aside and
  focus on implementation priorities, roadmap and
  scenario development.

7
1.1 Market Pull Distribution Infrastructure

• Low carbon fuels definitions and vehicle
  technology language added throughout policy
  (multiple low carbon fuels and technology)
• Goals revised
• Focus on low carbon fuels technologies
• Emphasis on biofuels, not a specific type of fuel
• Steady ramp up of low carbon fuels goals
• Detail added to green retailers program as
  implementation mechanism

8
1.1 Market Pull Distribution Infrastructure

• Issue to resolve-advocating for an ethanol blend
  increase
• Language did exist to advocate for a blend
  increase from 10 to 15-20
• Some advisory group members expressed some
  discomfort with advocating for a blend increase
• Some advisory group members strongly support
  advocating for a blend increase
• What should be the BTAG position?
• Staff suggestion Add language supporting EPA
  raising the blend level, but not specifying an
  amount.
• If we negotiated a precise amount, what would
  people be willing to commit to?

9
1.2 Low Carbon Fuel Standard

• LCFS recommendations approved by MGA steering
  committee
• Discussion on LCFS implementation tomorrow

10
1.3 Increase Vehicle Fuel Efficiency

• Goal Revisions
• Goal for on-road and off-road vehicle emissions
  reductions removed
• Goals added to address vehicle fleet turnover
• Need to flesh out specifics
• Detail added to policy description and design
• Implementation mechanisms added under financial
  incentives, regulations and guidelines and
  legislation

11
1.3 Increase Vehicle Fuel Efficiency

• Implementation mechanisms added
• Electric vehicle demonstration projects
• End of life assistance/buyback program
• Permit sale of high efficient vehicles from U.S.
  and non U.S. automakers not currently available
  in the market
• Work with utilities to add EV component to smart
  grid plans
• Provide price support/cost recovery for
  automakers during transition to more efficient
  vehicles
• Support federal fleet modernization (aka cash
  for clunkers)

12
Fleet modernization

• General discussion on 2 conference calls about
  this issue, and several options exist
• Cash for Clunkers program to replace older
  vehicles is this a state policy? Or are we
  supporting the federal bills?
• State fleet modernization support for
  modernizing state fleets with more fuel efficient
  vehicles.
• Is there support for adding language to the
  implementation section (not a new policy, just a
  new implementation strategy) of BT 1.3

13
2.1 Vehicle Miles/Demand Management Pricing

• Pay-as-you-drive
• Provides incentives and removes regulatory
  barriers for auto insurance companies to
  institute a pay-as-you-drive (PAYD) system for
  policyholders.
• Goal revised
• Assume market penetration of PAYD insurance of
  15 in 2015 and 75 in 2025

14
2.1 Vehicles Miles/Demand Management Pricing

• Impact on rural drivers addressed
• Brookings Institute Hamilton Project study
• PAYD premiums vary depending on other risk
  factors such as lower accident incidence in rural
  areas. Rates would also be relative to average
  driving patter for each local area
• Study concluded no adverse impacts on rural
  drivers

15
2.2 Expand Travel Choices

• Major changes
• Content reorganized and detail added to policy
  design
• Implementation mechanisms added for each mode
• MGA states commit to fully implement MWRRI
• Adequate governance and taxing authority by
  states for securing federal local transit funding
• Complete streets for bicycle and pedestrian
  expansion
• Goal
• Increase transit ridership per capita 2 annual
  from 2010-2025

16
2.3 Transportation Infrastructure and Planning

• Goal revision
• Reduce the number, frequency, and distance of
  trips made by driving, with the goal of a return
  to the per capita rate of driving of the early
  1980s. Progress to be measured as a reduction of
  VMT per capita by 40 from a 2005 baseline by
  2050.

17
2.3 Transportation Infrastructure and Planning

• Overview of changes
• Additional implementation mechanisms added and
  reworked
• References to related programs/policies
• Detail added to estimated GHG reductions and
  costs/savings section
• Detail added to key uncertainties
• Detail added to additional benefits and costs

18
2.4 Freight Transportation

• Goal revisions
• Reduce the GHG intensity per ton mile by 20 by
  2025.
• Remove bottlenecks that impede mode-shifting such
  as the CREATE project, shortages of dock space
  and technological improve to increase
  utilization.

19
2.4 Freight Transportation

• Overview of changes
• Detail and content reorganized for implementation
  mechanisms
• Rail-infrastructure efficiencies
• State and local governments factor GHG emissions
  into purchasing decisions
• Maximize ARRA funding for freight electrification
  infrastructure
• River and lock improvements
• Long-term rail upgrade and modal movement

20
BT 3-Research Technology

• Overall policy options ranked low during working
  group implementation priority setting in January.
• Staff added references to ARRA where appropriate.
• Simple text revisions completed, but no
  substantial edits.

21
BT 4-Biobased Products

• Overview of changes
• Policy reviewed by Mike Bailey, Ohio Department
  of Agriculture
• Added implementation mechanisms consistent with
  OH Dept. of Agriculture process on biobased
  product development

22
5.1 Perennial Biomass Supply

• Summary of changes
• Content streamlined and reorganized in policy
  description and design
• Implementation mechanism focus is federal funding
  opportunities
• Implementation mechanisms reorganized and
  streamlined
• Additional related policies/programs added

23
5.2 Biomass Feedstock Supply Logistics

• Overview of changes
• Content streamlined and reorganized in policy
  description and design
• ARRA funding added to implementation mechanisms
• Complementary federal programs added

24
BT 6-Wealth Creation and Jobs

• Overview of changes
• Overall policy options ranked low during working
  group implementation priority setting in January
• Opportunity for a cross-cutting issue group or
  rolling these recommendations into Governor
  Granholms Green Jobs initiative
• Content reorganized and streamlined in policy
  description and design
• References to ARRA added
• Feedback from cluster members incorporated

25
Discussion of roadmap outline Review of draft
scenarios

• Liz Marshall, World Resources Institute
• Jane Ruliffson
• Objectives

26
Implementation Discussion

• Objectives
• Review implementation strategy
• Discuss potential participants

27
Federal Biomass Policy

• Key decision
• Whether to recommend a strategy to steering
  committee
• Whether to recommend an MGA/NCBC partnership
• NCBC partnered on the LCFS work
• Other objectives
• Review overall strategy
• Discuss other federal opportunities
• Discuss state-specific opportunities

28
Process

• Partnership w/ NCBC
• Stakeholders
• Electric utilities
• Existing biomass projects
• Show Me Energy
• Ag groups
• NGOs
• State Departments of Ag

29
Biomass goal

• Increase overall funding for Midwestern biomass
  projects
• Implement the goals laid out in the Policy
  Options Document

30
Biomass Crop Assistance Program

• Push for early pilot projects
• Push for program funding

31
Other federal programs

• Track other federal rule-makings on biomass
  programs and make recommendations as appropriate
• Repowering Assistance and Biorefinergy Assistance
  from the 2008 Farm Bill
• The 800 million competitive grant program for
  biomass to fuel conversion authorized in the
  American Recovery and Reinvestment Act of 2009
  for biomass related projects and
• The Agricultural Bioenergy Feedstock and Energy
  Efficiency Research and Extension Initiative in
  Title VII (Research) to improve biomass,
  production, biomass conversion in biorefineries,
  and biomass use. Provides grants of up to 50 of
  cost for energy efficient research and extension
  projects. Establishes a best practices database
  of biomass crops. Authorized appropriations of
  50 million annually for FY2008-12. Sec. 7207

32
State policy

• Make recommendations, as needed, on needed state
  policies to achieve BTAG goals in this area.

33
Low Carbon Fuels Standard

• Discussion Questions
• Suggestions for participants from
• Electricity
• Hydrogen
• Other advanced fuels
• Respond to our proposed emphasis
• ILUC
• Fossil baseline

34
LCFS Background

• LCFS part of original Platform
• Year-long process in partnership with NCBC
• Final recommendation approved by LCFS Working
  Group in January 2009
• Final recommendations approved by BTAG in January
  2009
• Final recommendations formally adopted by MGA
  Steering Committee in March 2009

35
What the governors agreed to

• Create a Regional Coordinating Body made up of
  regulatory agencies this is the decision-making
  body for the process
• Create a Scientific and Technical Committee made
  up of stakeholders, which will make
  recommendations to the RCB

36
Process cont

• RCB and STC will
• Develop design recommendations for a MW LCFS
• LCA rules
• Credits and Deficits
• Scope
• What fuels are included
• Etc.
• Perform any research needed to develop a
  recommended policy
• Coordinate with other regions and the federal
  government

37
What is unique about the Midwest, and why would
this make our LCFS different?

• Biofuels
• Manufacturing economy
• Oil/Tar sands

38
Proposed emphasis

• Recommendations for federal policies
• RFS rule is there time?
• Waxman-Markey
• Study how an LCFS would be met in the Midwest
• What would be the environmental and economic
  impacts?
• Is our mix of fuels the same or difft than CA?
• What unique risks/opportunities do we have?
• What is the baseline of petroleum use and
  emissions, and what efficiency-related
  improvements are possible?
• Indirect Land Use Change
• What options exist beyond including ILUC in an
  LCA analysis for addressing international land
  use change
• Credit program? Offsets?
• 4. Final design recommendations
• Review of CA LCFS draft rule
• Areas of agreement and disagreement
• Focus on specific issues
• Use of RINs system
• How will electricity and other advanced fuels be
  handled?

39
Providing Input to MGA Green Jobs Initiative

• Gary Yakimov, Corporation for a Skilled Workforce
• Objectives

40
Transportation Policy

• Goals
• Implement that transportation policies and goals
  in the Policy Options Document
• Decision
• Whether to continue to pursue something in this
  area, developing a more coherent idea and seeking
  funding to staff a project.

41
Collective regional policies

• Midwest Regional Rail Initiative
• CREATE

42
Policies benefiting region, requiring state action

• Pay-as-you-drive insurance
• State-by-state analysis of where this type of
  insurance is not allowed
• Possible state-specific action to remove
  regulatory hurdles
• Transportation planning and infrastructure
• How can states implement a comprehensive strategy
  to reduce VMT

43
Wrap-up and Next Steps

• Reconvene 1.1
• Review minor POD changes (BT2)
• Need to sign-off on BT 6
• Resolve w/ other staff who is doing what with
  PHEV cross-cutting policy
• Input on scenarios as they are developed
• Input on roadmap as further drafts are developed
• Additional meeting???