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New Study: Clean Fuels Are Good for the Economy in Northeast, Mid-Atlantic

Luke Tonachel

Posted August 17, 2011

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The state of Maine recently released an economic analysis of a regional clean fuels standard for 11 states in the Northeast and Mid-Atlantic.

The verdict: The region can cut air pollution, slash our dangerous dependence on oil, bring in billions of dollars to local economies, and create thousands of American jobs under a Clean Fuels Standard (CFS).

This is welcome news as drivers struggle with gasoline prices that are up nearly a $1 per gallon from this same time last year. And it’s particularly significant here in the Northeast and Mid-Atlantic, where transportation is the single largest emitter of carbon air pollution and nearly 100 percent of our fuels are imported from outside the region.

Fortunately, a clean fuels standard can promote stability in fuel costs, while improving our self-sufficiency with cleaner, domestic fuels and put us on a pathway away from oil.

How it works:

Under a CFS, our region follows a gradual trajectory away from today’s reliance on oil as a transportation fuel, to fuels that emit less carbon dioxide air pollution. The clean fuels standard doesn’t ban any single fuel or require use of any single fuel. Rather, it sets a cleaner performance threshold for transportation fuels, which encourages innovation and investment in all fuels cleaner than petroleum, and lets the market decide which ones flourish. Clean, low-carbon fuel examples include electricity for electric vehicles and advanced biofuels.

And on the flip side, it encourages companies to move away from the dirtiest sources, like fuels made from tar sands that emit more carbon than conventional gasoline fuel.

Economic benefits:

The economic analysis, led by 11 Northeast and Mid-Atlantic states and the Northeast States for Coordinated Air Use Management (NESCAUM), evaluated the benefits of cutting the carbon intensity by 10 percent in 10 years in cases with both low and high oil prices. In all cases, the results are positive. In just the 10th year, the study found the following:

  • Employment increases by 9,490 to 50,700 jobs. Gross regional product, a measure of the states’ economic output, increases by $2.1 billion to $4.9 billion.
  • Household disposable income increases by $1 billion to $3.3 billion.
  • Gasoline and diesel demand drops 12 to 29 percent.
  • Carbon pollution from transportation is cut by 5 to 9 percent.

Looking over the whole 10-year period, the net benefits range from $26 billion to $55 billion when including reductions in petroleum consumption and the costs of clean fuels, vehicles and infrastructure.

Job growth comes from the provision of cleaner fuels and their infrastructure as well as the increase in disposable income being reinvested in the economy. Electricity and natural gas for transportation need charging and fueling stations and biofuel manufacturing facilities need to be built, supplied with biomass, and operated. Industry sectors dependent on household and business spending, such as healthcare, finance and insurance also see a boost.

As my colleague Nathanael Greene points out, it’s no surprise that the oil industry, which has invested heavily in the status quo of dirty fuels and is trying to bring in more, dirtier tar sand fuels, is already trying to dismantle clean fuel policies.

We cannot let Big Oil stand in the way of American jobs and economic progress. A Clean Fuels Standard can put us on the right path to a stronger, more secure economy and cleaner air.

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Enchanting EthanolAug 18 2011 11:00 AM

Theoretically, the Clean Fuel Standards sounds great but “advanced biofuels” do not exist. So it is likely that the standard will be largely met with corn ethanol with all its serious environmental problems— inefficiency, land use issues, waterway pollution, food security/inflation, etc.

The World Bank, Oxfam, U.N. Food and Agriculture Organization, and others have been implicating corn ethanol as a factor in the rising cost of food, and famine.

Your comment that ”biofuel manufacturing facilities need to be built” should be examined in light of Pennsylvania’s biofuels history. Former PA Gov. Rendell was a biofuels cheerleader.

Pennsylvania 1st ethanol plant, Bionol/Clearfield, only a few years old and supported by $17.4 million of taxpayer money , is now an abandoned industrial site.

And it continues…. PA Gov. Corbett is giving $8.75 million for a biofuels plant to two organizations, Perdue and LCSWMA(Lancaster County Solid Waste Management Authority), both, recently involved in failed biofuels initiatives (Perdue a plant and LCSWMA two proposed plants).

"A major unsecured creditor is Perdue Grain & Oilseed, an affiliate of chicken company Perdue Farms Inc. that is owed approximately $9.4 million. Last October, Perdue Grain said in a statement that it struck a deal to supply Bionol Clearfield with 40 million bushels of corn and to sell the grains that are a byproduct of the company's ethanol production."(Wall Street Journal Dow Jones Financial Information Services7/21/11)

LCSWMA wasted lots of citizen/taxpayer time and money trying to put two ethanol plants on farmland on the banks of the Susquehanna River.

So it looks like Gov.Corbett is continuing Gov. Rendell’s pattern of supporting “green jobs” that are not really “green.” And maybe the Clean Fuel Standards would work if biofuels, especially corn ethanol, were not considered clean fuels.

Enchanting EthanolAug 18 2011 11:17 AM

For comment please go to

Luke TonachelAug 19 2011 11:42 AM

Enchanting Ethanol:

The CFS sets a performance standard that can be met through a range of fuel alternatives. It sets up a process of investing in innovation and pushing new, cleaner fuels to the market. It’s a long-term strategy and signal to the market.

According to the economic analysis, non-food biomass is available in the region for fuel production. Furthermore, if performance is measured as it is under the CA Low Carbon Fuel Standard or the EPA Renewable Fuel Standard, the use of most corn ethanol would actually be discouraged under a CFS. You only have to search NRDC’s blogs for “ethanol” to see that we share your concern about corn ethanol.

The details for a northeast/mid-Atlantic region CFS are yet to be specified. Consideration of the potential availability of petroleum alternatives is an expected part of the process for setting stringency. Within the regulation there could be the inclusion of an alternative compliance mechanism that protects the environmental and security objectives of pollution and oil consumption reduction while also dealing with unexpected shortages of alternatives. Such a measure would use funds from the traditional fuel providers (oil companies) to pay for advancements in non-oil alternatives (such as electric vehicle use) or other transportation alternatives that reduce pollution (like transit).

The value of the CFS is that it puts the transportation fuels sector on a pathway to a cleaner future and taps American ingenuity to get us there.

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