Today Environmental Defence Canada and NRDC are releasing a comparison of the low carbon fuel standards (LCFS) of California and British Columbia.
The verdict?
BC’s is a hundred pound weakling next to Schwarzenegger’s muscle. This is a shame in light of other good things that BC is doing on climate change – but this one has backfired due to the bad precedent it has set.
Our comparison comes at a time of intense lobbying by the Canadian government and tar sands industry in an attempt to weaken fuels progress in California, Washington, DC, and the European Union.
Unfortunately, the industry is already trotting out the weak BC standard in its attempts to undermine progressive action. The BC approach fails to do what the LCFS is supposed to do – require fuel suppliers to account for differences in global warming for different fuels. It ignores any accounting for high-carbon petroleum fuels. Nor does it separate the good biofuels from the bad ones. As such, unless it is fixed, the BC LCFS will likely do more harm than good in fighting global warming around North America and the world.
A LCFS is supposed to require that the “life cycle” carbon emissions of transportation fuels – the amount of pollution created by producing, transporting and burning the fuel – goes down over time. It is a tool that governments can use to cut global warming pollution and reduce oil dependency in the transportation sector.
California and BC are the first jurisdictions in North America to adopt low carbon fuel standards. They both set the same goal – to reduce the carbon content of fuel by 10% by 2020 – but that’s about the only similarity between the two.
While California requires fuel suppliers to account for carbon-heavy oil they sell, like tar sands oil, BC allows them to lump all fossil fuel together as if all are created equal from a carbon pollution perspective. Yet the life cycle carbon content of tar sands oil is 15-40% higher than conventional oil. This lets suppliers of tar sands oil off the hook for reducing emissions, and puts more burden on everyone else to do more than their fair share.
Already, roughly half of BC’s oil comes from the tar sands, and this is likely to increase as tar sands production ramps up over the next decade. As it stands, BC’s LCFS will do little to prevent the rise in global warming pollution that will result. The accounting loophole could allow a worsening petroleum mix to completely offset the benefits from any additional low carbon fuels used.
On biofuels, another glaring difference between the BC and California standards is in their treatment of the land use impacts of various biofuels. When land is used to grow biomass for fuel instead of food, new areas of forest or wetlands will inevitably be turned into farmland. This can have a big impact on the carbon stored in the ground, and when it is taken into account, some biofuels can lead to higher life cycle carbon emissions than fossil fuels. California, the U.S. EPA, and the European Union have all conducted significant analysis and modeling to account for this significant impact while BC has arbitrarily given a zero value without justification.
Low carbon fuel standards should encourage a transition to alternative fuel sources that produce less emission. The California standard achieves this by taking the land use impacts of biofuels into account, and can help drive innovation and research on new sources of fuel. The BC standard fails to do this, and thus props up some biofuels that may in fact be worse for the climate.
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Three technology horses are in this race – batteries used in plug-in hybrid electric vehicles (PHEVs) such as the GM Volt and in battery-electric vehicles (BEVs) such as the Nissan Leaf, hydrogen used for fuel cell vehicles (FCVs) such as the Honda Clarity, and advanced biofuels that are produced sustainably. By our count, twelve major automakers are making serious investments to launch PHEV and BEV vehicles over the next five years. Several majors have also committed to commercializing FCVs in five to ten years. A number of start-up companies with serious investor backing have also entered the technology race and are introducing models of innovation to the industry. Numerous advanced biofuel companies, spurred on by policies like the low carbon fuel standard, are developing the next-generation of new fuels that will avoid competition with food-based crops.
Collectively, these efforts represent critical steps to ending our oil dependency and shifting to a clean energy economy. The key challenge for automakers, battery and fuel cell producers, low carbon fuel producers, and the U.S. government will be to further drive investment and innovation to help bring down costs. With China, Japan, South Korea, and European governments all investing heavily in electric drive and energy storage technologies, the U.S. cannot stay on the sidelines and expect to stay competitive in a clean energy economy.
Recently, a committee from the National Research Council (NRC) released a report evaluating the challenges of transitioning to PHEVs that can run on electricity from the grid or gasoline. The NRC report was sanguine about the prospects of plug-in hybrids and cited the cost of batteries as the main drawback -- leading one major newspaper to declare efforts to fund plug-in hybrids a “bad deal for taxpayers.”
The reaction misses the fact that all three horses are core enabling technologies that can work in synergy and fulfill different consumer needs. The electric drive system can run on batteries or fuel cells. The plug-in hybrid can run off advanced biofuels and either energy storage systems. Interestingly, an earlier 2008 report from the same NRC committee argued a portfolio of technologies – in conjunction with new policy drivers --
“has the potential to nearly eliminate gasoline use in light-duty vehicles by the middle of the century, while reducing fleet greenhouse gas emissions to less than 20 percent of current levels. This portfolio approach provides a hedge against shortfalls in any one technological approach and improves the probability that the United States can meet its energy and environmental goals.”
We’ll need all three horses in this race.
Not surprisingly, the findings of the current NRC report have been received with controversy, especially as automakers and battery manufacturers are beginning to commercialize PHEVs and BEVs. A debate has now begun on the battery costs assumptions used for the NRC report, which cited a range today of $1250 to 2000 per kilowatt-hour (kWh) of usable battery energy versus a Department of Energy estimate of $400 to $800 per usable kWh, a study by TIAX estimating $264 to $710 per usable kWh, and a review by the California Air Resources Board that cited a range of $580 to $800 per usable kWh.[1] It’s clear that such wide discrepancies on cost estimates will need to be resolved before firm conclusions can be drawn from the NRC report.
That said, the NRC report does reaffirm that strong government action will be needed to transition us to electric drive, regardless of whether battery or fuel cells provide the juice. The strategic decision that the federal government needs to make is whether we transition to clean vehicles and fuels or continue to rely on a single, dirty energy source -- oil. The decision to make a transition means we need strong performance-based standards that will drive vehicle efficiency and low carbon fuels. It also means we need manufacturing and consumer incentives to help bring down the initial costs of electric-drive and energy storage technologies. The auto industry can create opportunities out of the crisis – we’re starting to see this occur. All we need to do now is to help seize victory from the jaws of defeat.
[1] All values reported in terms of "usable kWh energy" using the assumptions from the NRC report.
]]>As my colleague Deron Lovaas has shown in our annual Fighting Oil Addition report, our addiction to oil continues to threaten not only our national security and global environmental health, but our economic vitality as well. What's unique is that it's not just environmental groups, national security groups, and the government carrying this message any longer. The Electrification Coalition represents major companies who also voicing the need for electrification as a strategy to reduce oil dependency. As they put it:
"Oil dependence weakens our national security, threatens our economy, and degrades the environment." (p. 22, Coalition report)
Vehicle electrification will be a critical pillar in the strategy to reduce oil dependency and reduce global warming pollution. One of the most important steps to moving the U.S. down this path will be ensuring that the U.S. passes comprehensive clean energy and climate legislation. As my colleague Luke Tonachel discussed in an earlier blog (April 6, 2009), the American Clean Energy and Security Act of 2009 (ACES) passed by the House in June includes major elements to help us move in the right direction -- providing revenue for clean vehicle investments and specific targets that will ensure reductions in oil and global warming pollution.
First, ACES ensures that the transportation sector is included under an overall economy-wide emissions cap. Second, it directs the President to establish clean vehicle performance standards (Section 221) that will help drive clean vehicle technology over the long term, including plug-in electric vehicles. Third, ACES includes a package of incentives that will increase the adoption of plug-in electric vehicles, including support for electric vehicle infrastructure (Section 122), regional large scale deployment programs (Section 123), and plug-in electric vehicle manufacturing incentives (Section 124). Earlier this month, similar provisions to those contained in ACES emerged from the Senate Environmental and Public Works Committee with the passage of the Clean Energy Jobs and America Power Act (S. 1733). This historic action clears the way for full Senate action on clean energy and climate legislation.
We support the goal of increasing transportation electrification as a critical strategy to reducing our oil dependence and ensuring our climate security. The passage of clean energy and climate legislation is one of the largest steps we can take to get us there.
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