‘Very doable’ low-carbon standard could boost economy, environment — researchers

Source: Jason Plautz, E&E reporter • Posted: Monday, July 23, 2012

A low-carbon fuel standard that would expand the mix of non-petroleum transportation fuels could build on the existing renewable fuels standard to advance clean fuels development, according to researchers behind a series of new reports on the policy.

By requiring companies to meet a goal for the carbon intensity of transportation fuels, a LCFS could not only diversify the mix of fuels on the market but could address some problems that have dogged the RFS, researchers said. The LCFS would encourage a broader suite of fuels and have a larger effect on the economy and environment than the existing RFS program, they said.

“A national low-carbon fuel standard is a promising framework to help solve the transportation energy challenges that have eluded us for several decades,” said Daniel Sperling, director of the Institute of Transportation Studies at the University of California, Davis. “Technologically, an LCFS is very doable. And it can help us address the complex choices with conventional oil, shale gas, oil sands, biofuels and electric vehicles.”

The findings came in peer-reviewed reports that will be published in a special edition of the journal Energy Policy. Six research institutions collaborated on the reports, which lay out the policy for an LCFS and potential impact on greenhouse gas emissions, energy security and fuel prices.

The researchers — led by the Institute of Transportation Studies at UC-Davis — considered an LCFS that would reduce the carbon intensity of fuels by 10 to 15 percent by 2030. Companies responsible for importing or producing fuels would be targeted under the program, subject to penalties for not meeting goals and able to trade and bank credits for certain low-carbon fuels.

Fuels should also be analyzed based on their life-cycle greenhouse gas emissions, researchers said.

Researchers see the effort as an overall benefit for both the economy and environment. For example, the study projects overall fuel savings of $411 billion by 2035 due to displacement of oil and production of more domestic fuels. The LCFS could also ease pressure on food prices and land use by encouraging fuels more diverse than just biofuels.

The program could be best implemented, Sperling said, by simply building it on the existing RFS, which sets a goal of 36 billion gallons of alternative fuels by 2022. Researchers said the current program is too narrow by focusing largely on ethanol and biofuels, while the LCFS would encompass everything from electricity to natural gas. The ability to adopt low-carbon fuel credits would also lead to more innovation, researchers said, by encouraging companies to explore more fuels.

Building the low-carbon standard on top of the existing RFS could mean an additional 3.4 percent reduction in greenhouse gas emissions on top of the projected emissions savings from the existing program. Overall, the study said, there would be a 4.5 percent reduction from businesses as usual with the two standards.


The RFS has come under fire of late, including in a pair of House hearings, with critics calling it a government mandate that has failed to lower gasoline costs.

The LCFS would set targets for reduction in carbon intensity from fuels but would allow companies to choose how to meet those goals. That, supporters say, would mean they could adopt a variety of strategies from electrification to biofuels or buy credits from companies specializing in low-carbon fuels.

A California LCFS program was adopted in 2009 but was ruled unconstitutional earlier this year and is currently awaiting action in an appeals court. A group of 11 Northeast and mid-Atlantic states have also been exploring a possible program, but political discontent could harm future progress.

Oil groups have also said that an LCFS will raise fuel prices and force fuels that may not be viable at this time. A report from the Consumer Energy Alliance, which represents oil and gas companies, found that the Northeast program could cause fuel prices to double and cause a $306 billion hit to the local economy (Greenwire, March 26).

“A national low carbon fuel standard would be an economic disaster for the United States,” said CEA Executive Vice President Michael Whatley in a statement today. “Americans spend a significant part of their family budget to cool and heat their homes and fuel their cars. A national LCFS, which would add significantly to this burden, is the wrong choice for energy consumers.

And at a panel discussion on the findings this morning, a representative of an oil lobbying group accused researchers of not presenting their findings to oil interests for review.

The reports will be discussed at a pair of congressional briefings today and tomorrow. Besides UC-Davis, the reports collected research from the Oak Ridge National Laboratory, the University of Illinois, the University of Maine, Carnegie Mellon University and the International Food Policy Research Institute. Funding for the studies came from the Energy Foundation and the William and Flora Hewlett Foundation.