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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/08/2011 - CITY FLEET USE OF CORN ETHANOLDATE: November 8, 2011 STAFF: Bruce Hendee, Ken Mannon, Tracy Ochsner, Lucinda Smith Pre-taped staff presentation: available at fcgov.com/clerk/agendas.php WORK SESSION ITEM FORT COLLINS CITY COUNCIL SUBJECT FOR DISCUSSION City Fleet Use of Corn Ethanol. EXECUTIVE SUMMARY The use of corn ethanol is a controversial topic. Ethanol is used in varying blends to reduce carbon emissions and thereby reduce the impacts of global warming. The use of corn ethanol has demonstrated benefits for the improvement of air quality and carbon emissions reductions, but comes with negative environmental and social factors. It has to be viewed as a short-term fix to a long-term problem. The benefits allow for a reduction in foreign oil dependence while improving air quality emissions from vehicles relative to the traditional use of gasoline. The negative social implications are that it takes away from an available food source and makes corn expensive. Corn for ethanol production is subsidized and tends to encourage this crop over others which might be used as a food source. A resulting trend from this over production is that food prices go up both for edible corn and other crops which are in less abundant supply. There is a subsequent impact on families in need of affordable and nutritious food. From an environmental perspective, the production of ethanol also has a negative impact. Because the crop is subsidized, it tends to encourage unsustainable farming practices. Farmers tend to add fertilizer and herbicides to encourage greater yields. Additionally, there is a tendency not to rotate crops. The resulting impacts are more fertilizer and herbicides in runoff from farm fields, and decreasing soil health. In fact, over-fertilization has created significant dead zones in the Gulf of Mexico. Currently City Operation Services has a policy of using alternative fuels, including E85 Blend (85% ethanol), when hybrid applications are not available and if the infrastructure is in place. There is currently substantial research on alternatives to corn based ethanol but, as of today, none of the alternatives have been successful at a commercial based production level. Complete elimination of use ethanol will increase carbon emissions from the municipal organizations operations by 525 metric tons of carbon dioxide per year without offsetting strategies. The challenge is in deciding the appropriate balance of strategies to reduce carbon emissions while still recognizing and protecting human and environmental considerations. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Should the City continue its approach to E85 (Alternative 4: Increase use of E85)? November 8, 2011 Page 2 2. If not, which of the other three alternatives does Council prefer? • Alternative 1: Stop using ethanol • Alternative 2: Continue using E85 at current levels only • Alternative 3: Switch from E85 to E50. 3. Does Council need more information? BACKGROUND / DISCUSSION I. National Ethanol Production and Mandates The Environmental Protection Agency (EPA) is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. The Renewable Fuel Standard (RFS) program regulations were developed in collaboration with refiners, renewable fuel producers, and many other stakeholders. The RFS program was created under the Energy Policy Act (EPAct) of 2005, and established the first renewable fuel volume mandate in the United States. As required under EPAct, the original RFS program (RFS1) required 7.5 billion gallons of renewable- fuel to be blended into gasoline by 2012. Under the Energy Independence and Security Act of 2007, the RFS program was expanded in several key ways and became the RFS2 standard: • expanded to include diesel, in addition to gasoline; • increased the volume of renewable fuel required to be blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022; As part of the regulations corn based ethanol was capped at 15 billion gallons/year. • established new categories of renewable fuel, and set separate volume requirements for each one. • required EPA to apply lifecycle greenhouse gas performance threshold standards to ensure that each category of renewable fuel emits fewer greenhouse gases than the petroleum fuel it replaces. The new standard recognized the following fuel types and established specific tracking standards for production called Renewable Identification Numbers. The new standards include: • Cellulosic Biofuels • Biomass based diesel • Advanced bio based fuels November 8, 2011 Page 3 II. Environmental Impacts of Corn Ethanol Energy Balance Energy balance compares the total amount of fossil fuel energy put into the process of making ethanol compared to the energy released by burning the fuel. A positive energy balance means more energy is created by burning the fuel than was used to make it. A majority of studies show that corn ethanol has a positive energy balance of 1.24 – 1.3 while studies show that gasoline has a negative energy balance of 1.23. This balance speaks strongly in favor of ethanol as a more productive form of energy in terms of efficiency to produce per gallon. Greenhouse Gas Emissions The EPA defines life cycle greenhouse gas emissions as the aggregate quantity of greenhouse gas emissions (including direct emissions and significant indirect emissions such as emissions from land use changes), including all stages of fuel and feedstock production and distribution and end use by the consumer. Whereas the energy balance looks primarily at fossil fuel energy inputs and outputs, life cycle greenhouse gas emissions also include impacts to carbon sequestration in soil and plants as a result of changing agricultural practices. A number of studies show that corn ethanol produces fewer greenhouse gas emissions than gasoline fuel. For example, research from Argonne National Lab has shown that corn-based E85 reduces greenhouse gas emissions 18-29% compared to gasoline. The U.S. Department of Energy’s position is that today, on a life cycle basis, ethanol produced from corn results in about a 20% reduction in greenhouse gas emissions relative to gasoline. In 2010, the City’s use of 61,945 gallons of E85 resulted in 525 metric tons of carbon dioxide avoided, compared to using traditional unleaded gasoline. For perspective, 2010 greenhouse gas emissions from the entire municipal organization were 44,730 metric tons carbon dioxide. If the City did not use E85, the 2010 greenhouse gas emissions would have increased to 45,225 metric tons carbon dioxide. Air Quality Impacts E85 provides the following changes in tailpipe emissions, compared to gasoline: • 17-23% reduction in carbon dioxide emissions • 20% reduction in carbon monoxide emissions • 30% reduction in particulate matter • 18% reduction in nitrogen oxides • Reduction in aromatics (benzene, 1,3 butadiene) • Increase in aldehydes (i.e., formaldehyde 50% increase) (Note: the aldehydes are less reactive than aromatics, and therefore less likely to contribute to ozone formation.) E85 is much less volatile than gasoline and therefore reduces ozone precursor emissions compared to gasoline. November 8, 2011 Page 4 Water Growing corn and producing ethanol both use water. In 2008, a National Research Council study found that agricultural shifts to growing corn and expanding biofuel crops into regions with little agriculture, especially dry areas, could change current irrigation practices and greatly increase pressure on water resources in many parts of the United States. In addition to increasing water demand, growing corn results in significant nitrogen loading of surface water and ground waters, and associated harm to the ecosystem, human and animal health. In addition, there can be water quality impacts from processing ethanol, including elevated emissions of phosphorus and residual chlorine into waterways. Land Use Impacts Increased corn production can lead to reduced crop rotation and depleted soil nutrients due to over- farming. In addition, clearing new land for biofuel crops will release more carbon into the air than was previously sequestered in the soil and plants. As corn production increases in the U.S. in order to meet larger corn ethanol demand, other crops, including soy, will be displaced. To compensate, land in other countries is being cleared to plant soy, and releasing carbon emissions from the deforestation. III. Social Impacts of Corn Ethanol Impact on food prices Producing ethanol for use in motor fuels increases the demand for corn, which ultimately raises the prices that consumers pay for a wide variety of foods at the grocery store, ranging from corn syrup sweeteners found in soft drinks to meat, dairy, and poultry products. In addition, the demand for corn may help push up the prices of other commodities, such as soybeans. This leads to the “food vs. fuel” debates over crop-based biofuels, including corn ethanol. A 2008 report of the United Nations attributes 70% of food price rise in 2007-2008 to biofuel crop expansion. A Council of Economic Advisors report (2008) attributes 20% of food price rise in 2007-2008 to the U.S. biofuel crop expansion; and 35% of the food price rise to global corn ethanol production. Similarly, a 2009 paper by the Congressional Budget Office attributes 10-20% of food price rise in 2007-2008 to biofuel crop expansion, while also citing energy price increases and growing demand for meat and associated needs for corn feed as contributing to the food price increases. IV. City Use of Ethanol The City of Fort Collins uses ethanol (E85, a blend of 85% ethanol and 15% gasoline) as part of a portfolio of approaches to reduce greenhouse gas emissions from its fleet. The use of ethanol as an alternative fuel (vs. the 10% that is already automatically blended into unleaded gasoline) supports the following municipal goals: November 8, 2011 Page 5 • Goal #1 - Reduce greenhouse gas emissions from municipal operations at least 2 % in order to achieve a reduction of 20% below 2005 levels by 2020; ultimately to achieve carbon neutrality for the municipal organization. • Goal #3 - Reduce traditional fuel use by the City’s vehicle fleet by 20% by 2020 • Administrative Policy 5.2 C1 – Reduce dependence on foreign oil. City vehicle purchasing policies call for the City to purchase hybrid vehicles whenever possible, followed by alternative fuels (as long as the fueling infrastructure is in place, the vehicle is built at the factory to accommodate alternative fuels, the economics including life cycle cost are beneficial to the City, and it meets the needs of the department). The table below summarizes various vehicle options available at this time. Table 1. Availability of Alternative Fuels for Specific Vehicle Applications Propane Compressed Natural Gas Plug-in Hybrid Electric Vehicle Hybrid Electric Flex Fuel (Ethanol blend) Bio- diesel Fuel Efficient Additional cost over a traditional vehicle $8-10K $50-60K busses; $5K vans $8-9K $2-4K na zero zero na Buses XX Staff cars XX X X Patrol X Pickups XX X X Heavy trucks X X = Currently available and part of the City of Fort Collins fleet V. Alternatives Analysis Below are 4 alternatives to consider. In addition to the 3 alternatives originally proposed in a memo to City Council on June 27, 2011 (alternatives 1-3 below), a fourth alternative has been added to continue using ethanol on the upward trajectory, as recommended for Council consideration by the Air Quality Advisory Board on October 2011 (alternative 4 below). The assessment below presents some of the pros and cons regarding the decision relative to the City’s policy goals and budget. 1. Stop using ethanol • Increase City greenhouse gas emissions by ~ 525 metric tons of carbon dioxide (1.2% of the entire municipal carbon inventory) • Increase air pollution emissions that contribute to ozone • Reduce certain air toxics (aldehydes) • Might have to pay back the Governors Energy Office $30,000 for stations November 8, 2011 Page 6 • Will not expand the municipal ethanol infrastructure • Will use more imported fuel (unleaded) unless another alternative found. 2. Continue using ethanol at current levels only • Lose future potential to reduce greenhouse gas emissions and air pollution emissions thru expanded E85 use • May end up paying higher total fuel costs if unleaded price rises and E85 does not. 3. Switch from E85 to E50 • E50 can be made available locally at no extra cost • Increase carbon emissions from the municipal operations by approximately 275 metric tons carbon dioxide • Keep grant money from the Governor’s Energy Office for the E85 stations • Maintain support for ethanol infrastructure so we can take advantage of cellulosic ethanol when commercially available. 4. Increase use of E85 • Realize greater carbon reductions • Keep grant money from Governor’s Energy Office for E85 stations • Supports investment in ethanol infrastructure to take advantage of cellulosic ethanol when commercially available. ATTACHMENTS 1. Air Quality Advisory Board memo 2. Air Quality Advisory Board minute excerpts 3. Natural Resources Advisory Board minutes excerpt 4. City staff white paper on Corn ethanol 5. Powerpoint presentation Natural Resources Department 215 North Mason PO Box 580 Fort Collins, CO 80522 970.221.6600 970.224.6177 Fax fcgov.com/naturalresources M E M O R A N D U M TO: Mayor Weitkunat and Councilmembers FROM: David Dietrich, Vice Chair, Air Quality Advisory Board CC: Darin Atteberry, City Manager Bruce Hendee, Chief Sustainability Officer Ken Mannon, Operation services Director Greg McMaster, Chair, Air Quality Advisory Board DATE: October 21, 2011 SUBJECT: AQAB Recommendation on Corn Ethanol ______________________________________________________________________________ The AQAB discussed the air quality aspects of the City’s use of corn ethanol E85 on October 17, 2011, and developed the following recommendation: Please contact me if you have any questions. The Chair, Greg McMaster, was not able to attend the Oct 17 meeting. Thank you for the opportunity to provide input on the corn ethanol issue. Dennis George moved, and Scott Groen seconded the following motion: o To continue to use E85 as an alternative fuel on the current trajectory o To encourage staff to continue to look for options and alternatives to traditional oil-based fuel sources o To develop and implement a plan to encourage Eco-Driving o To maintain the City’s focus to reduce greenhouse gasses and meet the goals of the Climate Action Plan Motion passed 8-0-0 Attachment 1 AQAB DRAFT Minutes excerpt from October 17, 2011 1 Corn Ethanol Bruce Hendee, Assistant to the City Manager, Tracy Ochsner, Assistant Operations Services Director and Ken Mannon, Operations Services Director joined a discussion lead by Senior Environmental Planner, Lucinda Smith about the air quality aspects of the City’s use of corn-based E85 flex fuel.  Questions had been raised in City Council meetings in the past regarding the use of corn ethanol by the City’s fleet and whether it should be discontinued because of adverse social implications. o The Air Quality Advisory Board agreed to hear about this issue and weigh in as to how it might affect air quality in Fort Collins. o Council will consider this issue at a November 8 work session.  As background, Lucinda Smith explained the corn used to make ethanol is not the same as human food corn. There are three sources of ethanol: o Fermented feed corn – Most common ethanol produced in the U.S. Current market share is 10%. o Corn and sugar from sugar-based crops like sugar cane and sugar beets (There are no sugar ethanol plants in the U.S.) o Non-food cellulose such as wood, grasses or biomass stock. Production in the U.S. is not produced at a commercial scale yet. Even though the Renewable Fuels Standard’s objective is to have 16.0 million gallons of cellulosic ethanol being produced by 2022, it is questionable how fast it can be brought on line as a viable, readily-available fuel.  City policies support using alternative fuels: o City policies have the goal of reducing GHG emissions 20% below 2005 by 2020, reducing traditional fuel use 20% by 2020, and reducing dependence on foreign oil o The City’s legislative policy agenda supports programs and policies that promote advanced low emissions vehicle technology and encourage or promote alternative fuels such as biodiesel, cellulosic ethanol, hydrogen and compressed natural gas. o The City is working to reduce fuel consumption by addressing driving behavior including limiting vehicle idling, vehicle fuel efficiency and the carbon intensity of fuel used by City vehicles. o City policy is to buy alternative fuel vehicles if: fueling infrastructure in place; the job application fits OEM vehicle; economics are beneficial to City of Fort Collins and the vehicle meets the needs of department.  Vehicle purchasing hierarchy: hybrids; alternative fueled vehicles; down-sized vehicle  Alternative fuel vehicle suitability and availability data indicates there are no incremental costs to purchase a flex-fuel vehicle. o The City has 96 flex-fuel E85 capable vehicles with 7 local fueling stations. o The City received a Governor’s Energy Office Grant for $30,000 to fund the building of one fueling station Attachment 2 AQAB DRAFT Minutes excerpt from October 17, 2011 2  The largest 2010 fuel usage was biodiesel (38%). Unleaded gas was 36% (a portion of which included mandated ethanol additive). o The cost of E-85 has varied a lot but is now approximately $3.20/gallon. Unleaded gas is approximately $3.50/gallon. Future prices could increase at an unknown rate. o Vehicles that use E-85 are not as efficient as those who use unleaded gas.  E85 Tailpipe benefits include reductions of approximately: 20% of CO2 and CO; 30% in particulate matter; 18% in NOx (nitrogen oxides), and aromatic s but a 50% increase in aldehydes. Other air quality benefits are that E-85 contributes less to ground level ozone.  Three alternatives for City fuel use have been proposed to City Council: o Stop using ethanol.  Would increase Greenhouse Gas (GHG) ~ 550 MTCO2e (1.2%).  Would increase other air pollution emissions that contribute to ozone.  May save money on fuel now but will change if prices increase.  Might have to pay back GEO $30,00 for ethanol station.  Use of more unleaded, imported fuel unless other alternatives are found o Continue using at current levels only  Would lose future potential to reduce GHG and air pollution through expanded E85 use.  May end up paying more fuel costs if unleaded price rises and E85 does not. o Switch from using E85 to E50  E50 can be made available locally at no extra cost  Would increase carbon emissions slightly.  City would keep grant money from GEO.  Justifies future purchase of flex-fuel vehicles to take advantage of cellulosic ethanol when commercially available.  A white paper was put together for Council in July 2010 that stated corn ethanol provides a near-term way for the city to reduce its fleet GHG emissions, and ethanol use is considered reasonable as a transition strategy until more sustainable biofuels are locally available. To exit from the use of corn-based ethanol, the City will annually evaluate whether other clean fuels choices have become available to meet the City's goals. It is anticipated that cellulosic ethanol may be locally available by the middle of this decade. Discussion  To answer Rich Fisher who asked what was motivating Council to want to stop using ethanol, Bruce Hendee stated it was a combination of: use of food for fuel; social impact; use of additional fertilizer; inorganic farming; government subsidy of corn E- 85 resulting in a gradual impact over time. o Rich Fisher stated it could be as much an energy issue as a social issue. The cost of producing ethanol is close to the cost of burning it. AQAB DRAFT Minutes excerpt from October 17, 2011 3  Lucinda Smith stated she saw several sources that came to the conclusion the net energy balance for ethanol is positive in that the fuel itself puts out more energy than the fossil fuels used to create it.  Dennis Georg discussed a Congressional Budget Office report he read regarding the implications of ethanol use on world food prices. The report concluded that, even if you look at the energy required to produce the ethanol, ethanol is a win on a lowered GHG emissions basis. Ethanol also has a bigger gain versus natural gas and coal and cellulosic ethanol has a dramatic gain to reduce GHG emissions. The report concluded the E-85 industry is not the cause of the increase of food costs worldwide; only a small factor. Worldwide demand for meat had a much greater impact on the cost of food by a factor of 5. Currency manipulation of the US dollar also has a higher impact on the cost of food than ethanol. .  Dave Dietrich stated his opinion that stopping use of E-85 production will not substantially affect production of feedstock corn because that corn will continue to be grown for the production of high fructose corn syrup, feeding animals, and other uses.  Dennis Georg stated it is his understanding production of corn for human food is only a fraction of the entire corn crop and it is on a downward trend because demand for animal feed is growing globally. It is not a local issue  Scott Groen pointed out some interesting facts about E-85: o Reporting mileage numbers on ethanol are tricky because there is a 20% loss in mileage when using ethanol. o The National Renewable Energy Laboratory (NREL) wrote a paper last year stating that although VOCs are reduced with E-85, they are finding other problems with E-85 contributing to ozone. o E85 is not 85% alcohol; up to 5% is gasoline to denature it (prevent it from being consumed as grain alcohol). o Scott suggested the City keep purchasing E-85 vehicles because, even if the City stopped using E-85, flex-fuel vehicles run fine on regular gasoline and they cost the same. o E50 is good idea because there is a new E-50 fuel is coming out soon that will increase mileage to be comparable to unleaded gasoline.  To answer Dennis Georg who asked if the City has data on mileage on regular gas versus E-85, Ken Mannon stated they have the data but it depends on the vehicle what mileage they get. We think E-85 is first step. Cellulosic fuel will be better. If we drop it down to E-50 it would get the fuel economy back up and have cleaner air. It takes 8 – 10 years to replace a vehicle.  Scott Groen stated biodiesel adds lubricity with less injector failures.  Dennis Georg stated there are many drivers to commodities. If the City really wanted to impact the social issues Council is interested in it would be impractical and outside the scope of the City  Bruce Hendee asked if the City should also look at purchasing compressed natural gas (CNG) vehicles or ethanol. o Dennis Georg suggested that looking at turbo diesels would be better. They are having a large impact Europe. o Scott Groen felt that Americans didn’t like diesel because of the noise and smell. AQAB DRAFT Minutes excerpt from October 17, 2011 4 o To answer Scott Groen who asked what is the cost per mile on diesels, Ken Mannon said the City is trying to reduce diesels. They have seen a positive mileage impact from busses being converted from diesel to natural gas. They are also clean, quiet and smooth o Dave Dietrich pointed out CNG is still a fossil fuel (CNG) with environmental impacts.  Dennis George emphasized the City would be better off from an air quality perspective to recommit to our Climate Action Plan goals and do a regular assessment to these alternatives as they come along to see if they are economically viable. It is not a good idea for a City Council member to dictate use of fuels.  John Schroeer liked the option to use E-50 because the City would still be getting benefit and use of the infrastructure and it would keep door open to new ethanol fuels.  Michael Lynn stated he didn’t see any basis to remove E-85 because the City would lose the ability to move forward and to take advantage of latest and greatest fuels.  Dave Dietrich stated the AQAB is not addressing corn growing and its use as a commodity for all the things it’s used for. Bruce Hendee will make a point to note that to Council. Dennis Georg moved and Scott Groen seconded the following motion: o To continue to use E85 as alternative fuel as current trajectory. o To encourage staff to continue to look for options and alternatives other than traditional oil use sources. o To develop and implement a plan to encourage eco driving o To maintain the city’s focus to reduce GHG and meet the goals of the climate Action Plan Motion passed unanimously NRAB DRAFT Minutes excerpt from Oct. 19, 2011 1 Discussion of Ethanol/Biofuel in City vehicles Discussion  Harry Edwards suggested adding a fourth alternative: To continue to grow ethanol- containing fuel as a no-action alternative. The City does a disservice to reject it out of hand.  Lucinda read the Air Quality Advisory Board’s recommendation to the NRAB that also recommended continuing to use E-85 fuel: o To continue to use E-85 as alternative fuel as current trajectory. o To encourage staff to continue to look for options and alternatives other than traditional oil use sources. o To develop and implement a plan to encourage eco-driving o To maintain the City’s focus to reduce GHG and meet the goals of the Climate Action Plan  Joe Piesman felt that the global food issue is so complicated that the City of Fort Collins can observe it but not affect it. In the future, trying feed seven billion people will be difficult. He sees this issue as one of balance of land use and energy. o Lucinda stated the AQAB also mentioned several studies that show the expansion of corn had an impact on price of food. The demand of corn for meat and high fructose corn syrup is another aspect of it.  Liz Pruessner stated because the US Department of Agriculture is subsidizing corn and promoting biofuels and biofuels plants in the farm bills millions of acres in conservation are being converted back to crops to make good money. It is crazy to take food and put it into our cars but an economic component is driving it. Plowing grasslands to turn them back to corn also has huge carbon emissions. It is also a political issue. If the City makes a political statement it probably won’t make a difference in whole big issue. Politically, everything is on the table with the federal deficit. They are looking at all the programs and many big changes may be coming. We might need to know where the federal subsidies go before the NRAB makes a decision. If the subsidies for corn ethanol are stopped, the prices will skyrocket. o Tracy Ochsner stated if price of ethanol goes higher could help make an easier decision because it would be an economic decision. o Harry Edwards cited an article in Chemical and Engineering News that stated the Department of Energy has been funding development of cellulosic biofuels but the development has been disappointing. They haven’t figured it out yet.  Joe Piesman stated sugar cane ethanol is highly efficient in Brazil. China is also getting more interested in alternative fuels and is in the research phase.  To answer Joe Piesman who asked if the compromise to reduce from E-85 to E-50 is doable, Tracy Ochsner stated it is doable, but more importantly still keeps us going – in event cellulosic ethanol does break.  Harry Edwards stated it was fortunate the City has well- informed staff considering this issue.  John Bartholow recommended the NRAB abstain from making any formal recommendation on this issue. He did not see any clear bearing on the Natural Resources of Fort Collins. Attachment 3 NRAB DRAFT Minutes excerpt from Oct. 19, 2011 2  Andrew Newman said things are in motion – if we waited we could make a better recommendation.  Lucinda Smith stated staff is not making recommendation but Council will be interested in reading the minutes to see what the NRAB’s discussion was.  Andrew Newman stated the City has many resources invested in E-85 fuel and it would be premature for the NRAB to make a recommendation before we understand the dynamics of what may develop in the next 12 months. Backing away from those resources would be a knee jerk reaction. Another issue would be the City would have to return the $30,000 for an E-85 fueling station. City of Fort Collins, Natural Resources Department May 27, 2010 1 Corn Ethanol White Paper Synopsis Evaluating the pros and cons of corn ethanol is a very complicated issue. Estimates of the net benefits or risks of corn ethanol are affected by assumptions about future crop productivity and production processes and there are contradictory conclusions in the literature. The City of Fort Collins uses ethanol (E85, a blend of 85% ethanol and 15% gasoline) as part of a portfolio of approaches to reduce greenhouse gas (GHG) emissions from its fleet. In 2009, ethanol comprised 3.8% of total City fuel use. The City has made investments into ethanol including about 100 ethanol capable vehicles and 4 fueling stations. The ethanol provided at the City’s ethanol fueling station is produced in Windsor, thereby reducing some of the negative impacts of corn ethanol in general, such as deforestation. While other fuels such as compressed natural gas (CNG) offer even greater tailpipe GHG benefits, there no other alternative fuel vehicle applications suitable for police vehicles, and very limited for options for the rest of the light duty fleet. Corn ethanol provides a near-term way for the City to reduce its fleet GHG emissions, and its use is recommended as transition strategy until more sustainable biofuels are locally available. However, the City should annually evaluate whether new CNG vehicle options or other clean fuels choices have become available to meet the City's goals. It is anticipated that cellulosic ethanol may be locally available by the middle of this decade. If the City were to completely stop using ethanol until cellulosic ethanol becomes available, GHG emissions would increase by 265 tons, and we would use over 20,000 more gallons of petroleum fuel based on 2009 usage levels. In addition, we would likely have to repay the State of Colorado Governors Energy Office about $30,000 of grant funding that was used for fueling infrastructure. Introduction The City of Fort Collins uses ethanol (E85, a blend of 85% ethanol and 15% gasoline) as one of several alternative fuels in its municipal fleet, for the purpose of reducing tailpipe and greenhouse gas (GHG) emissions and decreasing our reliance on foreign fuel. Currently, only ethanol made from corn is widely available in the USA. There has been much debate in recent years about the net value of corn ethanol as a replacement for fossil transportation fuel. Issues include the net energy balance, net greenhouse gas emissions, impact on food supply and prices, feasibility of meeting future transportation fuel needs, impact on national security, and its role in transition away from carbon intensive fuels. Research studies show greatly varying results for energy balance and GHG emissions. The diversity of these findings is, in part, attributable to differing methodologies, including widely ranging assumptions about future conditions of crop production, which inputs and outputs (such as unfermented distillers grain by-product) should be considered, what condition the crops are planted in, and over what time period the impacts should be calculated. This white paper takes a brief look at the most current perspectives on these issues. Definitions Corn ethanol, as defined in Wikipedia, is ethanol produced from corn through industrial fermentation, chemical processing and distillation. It is primarily used in the USA as an alternative to gasoline. Corn ethanol is the most common type of ethanol in the United States, but is considered less efficient than other types of ethanol (sugar cane, etc.) because only the grain is used and many petroleum-based products such as fertilizer and pesticides are used in its production.1 ATTACHMENT 4 City of Fort Collins, Natural Resources Department May 27, 2010 2 Sugar ethanol is ethanol produced from sugar based crops including sugar cane and sugar beets. Brazil is the second largest ethanol producer in the world, behind the U.S., and the largest producer of ethanol made from sugarcane. By promoting sugar-based ethanol and increasing domestic oil production, Brazil eliminated its dependence on foreign oil by 2006. There are no sugar ethanol plants in the USA. Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible part of plants. Energy Balance Two of the major issues regarding corn ethanol surround its energy balance and its life-cycle greenhouse gas emissions. The energy balance compares the total amount of energy put into the process of making ethanol compared to the energy released by burning the fuel. A positive energy balance means more energy is created by burning the fuel than was used to make it. For the sake of clarity, this will be referred to in this paper as a favorable energy balance. A number of studies show that the energy balance of corn ethanol is positive and therefore favorable (i.e. it prodcues more energy when burned than it takes to make it). In 2005, USDA reported an energy balance of 1.24 for corn ethanol (1.24 units of energy produced for every 1 unit to create the fuel).2 A 2006 a study from the University of Minnesota also found that ethanol yields 25% more energy than the energy invested in its production, hence a positive and favorable energy balance of 1.25.3 In 2007, a Natioanl Geographic article reported 1.3 energy balance for corn ethanol.4 However, there are also studies claiming a negatvie energy balance for corn ethanol. Most notable is the 2005 study by David Pimentel from Cornell University and Tad W. Patzek at UC Berkeley.5 Their study found that corn ethanol requires 29 percent more fossil energy than the fuel produced when combusted. This study considers the energy required to produce and repair farm machinery and ethanol processing equipment. The study also states that it costs substantially more to produce ethanol that it is worth on the market. The study also notes other major environmental impacts including the fact that corn production uses more herbicides and pesticides than any other crop produced, and results in significant water use and pollution. Clearly, energy balance study results are affected by which inputs are considered. There is still debate on whether to include inputs such as energy required to feed the people growing the corn, the energy needed to maintain the farm equipment (i.e. for fencing material, etc.) and the energy embodied in farm equipment. There is also no consensus on what value to give the corn by-product such as the stalk, commonly known as the ‘coproduct’. Some studies leave it on the field to protect the soil from erosion and to add organic matter, while others burn the coproduct to power ethanol plants but fail to address the resulting soil erosion (which would require energy in the form of fertilizer to replace).6 Some studies use the coprodcut as feed for livestock. In 2006, a study reported in Science magazine looked at six ethanol energy balacne studies. After normalizing for assumptions and input/output boundaries, this study concluded that ethanol produced today (2006) is less fossil fuel-intensive than gasoline, although it did not report a net energy balance for corn ethanol.7 Figure 1 below from a National Renewable Energy Lab presentation plots a number of ethanol energy balance studies, with the majority with a positive (favorable) energy balance.8 City of Fort Collins, Natural Resources Department May 27, 2010 3 Figure 1. Ethanol Energy Balance Study Results It is also useful to evaluate energy balance of gasoline production. Argonne National Lab reports a negative and unfavorable energy balance of 1.23 for gasoline production.9,10 This means that for every BTU of gasoline burned, it took 1.23 BTU’s to create the fuel (for extraction, processing and transportation). There are significant national security costs associated with the use of traditional petroleum fuel as well. Greenhouse Gas Emissions Another criteria for evaluating corn ethanol is greenhouse gas emissions. EPA defines lifecycle GHG emissions as the aggregate quantity of GHG emissions (including direct emissions and significant indirect emissions such as emissions from land use changes), including all stages of fuel and feedstock production and distribution and end use by the consumer.11 Whereas the energy balance looks primarily at fossil fuel energy inputs and outputs, lifecycle GHG emissions also include impacts to carbon sequestration in soil and plants as a result of changing agricultural practices. A number of studies show that corn ethanol produces fewer GHG emission than gasoline fuel. For example, research from Argonne National Lab has shown that corn-based E85 reduces GHG’s 18-29% compared to gasoline.12, 13 The Colorado Governor’s Energy Office also states that the use of corn ethanol reduces GHG emissions. It states that on a per-gallon basis, corn ethanol could reduce GHG emissions by 18% to 28% when the complete life-cycle of the fuel is considered and that cellulosic ethanol (ethanol made from plant fiber materials) offers an even greater benefit, at 87% reduction in GHG emissions of the life cycle of the fuel. 9 City of Fort Collins, Natural Resources Department May 27, 2010 4 The EPA’s GHG emissions factor for corn-ethanol combustion is 37% lower than the factor for gasoline combustion. However these factors are used for reporting Scope 1, or “direct” emissions that occur right within a reporting entity’s boundary, and probably do not take into account lifecycle impacts. Indirect Land Use Impact on GHG Emissions When total life cycle emissions, including indirect carbon dioxide emissions caused from clearing land, removing plants that trap CO2 and releasing carbon from the soil are considered, the GHG picture for corn ethanol may change. Two studies published in Science magazine in 2008 ("Land Clearing and the Biofuel Carbon Debt" and "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land Use Change"), indicate that land use changes associated with production of biofuels leads to increased net carbon emissions. In “Land Clearing and the Biofuel Carbon Debt", Tilman and his colleagues examined the overall CO2 released when land use changes occur. Converting the grasslands of the U.S. to grow corn results in excess greenhouse gas emissions of 134 metric tons of CO2 per hectare, creating a carbon debt that would take 93 years to repay by replacing gasoline with corn-based ethanol.14 In “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land Use Change”, Searchinger finds that ethanol demand in the USA has caused some farmers to plant more corn and less soy. This has driven up soy prices, causing farmers in Brazil to clear more Amazon rainforest land to plant valuable soy. Because a soy field contains far less carbon than a rainforest, the greenhouse gas benefit of the original ethanol is wiped out. His study concluded that corn-based ethanol, instead of producing a 20 percent savings in GHG emissions, nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years.15 These two studies led to the conclusion in a February 2008 Scientific American article that biofuels are just plain bad for the land. 16 These two studies by Tilman and Searchinger are contested by the U.S. Department of Energy, who criticizes the assumptions used by the authors as outdated and/or incorrect. The DOE paper documents why they find the assumption erroneous.17 However, a number of studies point out that some of these negative impacts could be mitigated in the future through improved practices. For example, a more recent study that evaluated the GHG emissions from biofuels concludes that a global greenhouse gas emissions policy that protects forests and encourages best practices for nitrogen fertilizer use can dramatically reduce emissions associated with biofuels production.18 Figure 2 below presented by Argonne National Lab summarizes the range of findings on GHG emissions benefits of ethanol, when compared to gasoline, with a the majority of studies showing a favorable GHG impact for ethanol.10 City of Fort Collins, Natural Resources Department May 27, 2010 5 Figure 2. Ethanol GHG Emissions Comparisons Impact on Food Productions and Prices Aside from the greenhouse gas emission impacts, there can be impacts on food production as a result of increasing biofuels, especially food crop-based biofuels. A team of researchers from the University of Kassel in Germany found that 90 percent of Brazil's sugarcane expansion in the last five years displaced cattle rangeland, forcing ranchers to push into the forest. This team concluded Brazil's plan to expand biofuel cropland over the next decade will push displaced rangeland into more than 47,000 square miles of forest and another 17,760 square miles of other native habitat.19 A recent UN report concludes that although the potential benefits are large, the biofuels boom could reduce food security and drive up food prices in a world where 25,000 people die of hunger every day, most under age five.20 The question also exists about how much capacity the USA has to grow biofuel crops. The EPA has estimated that current sustainable production of corn for fuel in the USA is limited to about 15 billion gallons of ethanol per year.8 A researcher at the University of Minnesota claims that if we convert every corn kernel grown today in the U.S. to ethanol we offset just 12 percent of our gasoline use," notes ecologist Jason Hill of the University of Minnesota.3 City of Fort Collins, Natural Resources Department May 27, 2010 6 Air Pollution Impacts Ethanol is known for reducing direct tailpipe emissions of particulates and carbon monoxide. The Colorado Governor’s Energy Office provides the following statement about the tailpipe benefits of ethanol9: Some pollutants in tailpipe emissions are reduced significantly, others are increased. Compared to gasoline in Tier 2 (passenger type) vehicles, ethanol produced the following emissions: • 55% to 70% less benzene, 1,3-butadiene, & PM2.5 when tested at 72°F • 19% less benzene and 69% less PM2.5 when tested at 20°F • 2 to 3 times more NonMethaneHydrocarbons when tested at 20°F • 50 to 120 times more acetaldehyde when tested at both 20°F and 72°F • 2 to 4 times more formaldehyde when tested at both 20°F and 72°F Ethanol has been widely distributed in the USA in “oxy-fuels” programs as an additive (up to 10%) in gasoline to reduce carbon monoxide emissions. However, ethanol is more volatile than gasoline and therefore contributes to the formation of ground level ozone, aggravating medical problems such as asthma. A study by atmospheric scientists at Stanford University found that if E85 was the primary biofuel used in 2020, its use would increase the risk of air pollution deaths relative to gasoline by 9% in Los Angeles, compared to deaths predicted from gasoline use in 2020.21 Correspondingly, for each billion gallons of ethanol fuel produced and combusted in the USA, the combined climate-change and health costs are $469 million for gasoline and could soar up to an estimated $952 million for corn ethanol, depending on the heat sources used at the biorefinery. This same study found that the health care costs associated with cellulosic ethanol could range from $123–208 million, depending on feedstock.22 Water Impacts A National Research Council committee was convened to look at how shifts in the nation's agriculture to include more energy crops, and potentially more crops overall, could affect water management and long- term sustainability of biofuel production. In terms of water quantity, the committee found that agricultural shifts to growing corn and expanding biofuel crops into regions with little agriculture, especially dry areas, could change current irrigation practices and greatly increase pressure on water resources in many parts of the United States. The committee also concluded that quality of groundwater, rivers, and coastal and offshore waters could be impacted by increased fertilizer and pesticide use for biofuels. High levels of nitrogen in stream flows are a major cause of low-oxygen or "hypoxic" regions, commonly known as "dead zones," which are lethal for most living creatures and cover broad areas of the Gulf of Mexico, Chesapeake Bay, and other regions. However, the report also notes that there are a number of agricultural practices and technologies that could be employed to reduce nutrient pollution.23 In addition, there can be water quality impacts from processing ethanol, including elevated emissions of phosphorus and residual chlorine into waterways.24 City of Fort Collins, Natural Resources Department May 27, 2010 7 U.S. Ethanol Policy The stated objectives behind national biofuels policies are to improve energy security and GHG mitigation. In 2007, Congress passed the Energy Independence and Security Act. This Act includes ethanol as an important element of the energy solution. It sets a goal to triple annual ethanol production to 36 billion gallons a year in 12 years. This goal includes 15 billion gallons of corn ethanol by 2022.25(Though critics say that this amount of ethanol production will require the entire corn crop in the US, every kernel of corn.26) This act also modifies the “Renewable Fuels Standard” (RFS) program. The guidance in the RFS program states that to meet the nation's renewable standard, a fuel's "life-cycle" carbon emissions must be at least 20 percent below that of gasoline or diesel in 2005.11 In February 2010, EPA and the Obama administration approved corn ethanol as a low-carbon renewable fuel that will meet the 20% GHG emission reduction threshold compared to the 2005 gasoline baseline.19 EPA’s underlying analysis is based on assumptions of significantly increased crop yields linked to production efficiencies that are likely to occur by 2022. EPA also considered the “Indirect Land Use Impacts (ILUI) that would occur in 160 other countries in this analysis as well. It is interesting to note that the finding of corn ethanol as a renewable fuel is in contradiction to California's determination in 2009 that corn ethanol carbon footprint was too big to help the state mitigate greenhouse gas emissions. The California assessment looked at current emissions associated with corn-based ethanol and concluded they were too steep to include it as a strategy.27 Critics of ethanol are also concerned about the cost of subsidies. Ethanol subsidies began in 1979. Today ethanol is being subsidized at a rate of 51¢ per gallon, which costs taxpayers over $4 Billion in 2008.16 Critics also claim that the vast majority of the subsidies do not go to farmers but to large ethanol-producing corporations.6 Cellulosic Ethanol Production of ethanol from cellulose may present a brighter picture in terms of reduced environmental impacts and food crop displacement. Cellulose is contained in the tough chains of sugar molecules that make up plant cell walls. Breaking the cellulose that make up the cell walls of non-food crop materials such as stalks, leaves, sawdust, and perennial grasses such as switch grass and buffalo grass could result in biofuels that do not compete with food crops. In its bioenergy policy, EPA anticipates a ramp-up of commercial production of cellulosic ethanol, starting with just a few plants in 2010, increasing to one billion gallons in 2013, 4.25 billion gallons by 2016 and 16 billion gallons of cellulosic ethanol by 2022. EPA’s strategy also calls for further investigation into more sustainable sources of cellulosic material, even including forest residues or organic waste in municipal solid waste.28 General Conclusion Evaluating the pros and cons of corn ethanol is a very complicated issue. Estimates of the net benefits or risks of corn ethanol are affected by assumptions about future crop productivity and production processes and there are contradictory conclusions in the literature. Some studies indicate that corn ethanol does not City of Fort Collins, Natural Resources Department May 27, 2010 8 have a positive energy balance, causes elevated lifecycle greenhouse gas emissions, harms water quantity and quality, and competes with food crops, while other studies indicate positive benefits. Critics argue that the massive US subsidies of corn ethanol only benefit large agribusinesses and do not benefit small farmers, and are very costly to the American taxpayer. These concerns are likely to render corn ethanol a poor long-term solution as a transportation fuel. However, as we approach conditions of peak oil when the demand for fuel exceeds the supply capacity, new sustainable alternatives are desperately needed. Promise may well lie in other forms of ethanol, such as cellulosic ethanol, especially if national and global policies are put in place to protect forest lands and support farming best practices that minimizing nitrogen fertilizer use in order to reduce the negative impact of ethanol production. "We can create ethanol in an incredibly dumb way," says Nathanael Greene, a senior researcher with the Natural Resources Defense Council. "But there are many pathways that get us a future full of wildlife, soil carbon, and across-the-board benefits." The key, Greene and others say, is to figure out how to make fuel from plant material other than food: cornstalks, prairie grasses, fast- growing trees, or even algae. That approach, combined with more efficient vehicles and communities, says Greene, "could eliminate our demand for gasoline by 2050." 4 City of Fort Collins Use of Corn Ethanol The City of Fort Collins has a goal to reduce GHG emissions from municipal operations 20% below 2005 levels by 2020. Embedded within that is a goal to reduce traditional fuel use by the City’s vehicle fleet by 20% by 2020. According to a number of references above, the GHG emissions associated with corn ethanol are lower than those associated with gasoline. Hence, the City began using E85 in 2007, consuming 2,332 gallons. In 2008, City use rose to 28,330 gallons. In 2009, the City used 28,240 gallons of E85, which represents 3.8% of the total City fuel used in 2009 for all operations. The City has several vehicles that can burn E85 or gasoline. There are currently five ethanol fueling stations in Fort Collins including the Poudre Valley Fuel Co-op on East Mulberry, Western Convenience on West Drake Road, the City Fleets Facility, Fossil Creek Park, and Spring Canyon Park. Currently, a gallon of ethanol costs about $2.20 in Fort Collins and a gallon of gasoline costs about $2.50. The City of Fort Collins’ E85 fuel is provided by the Windsor ethanol plant. Most of the corn used in the Windsor plant is produced locally. The plant buys as much local corn as we can during the harvest season from Weld County and beyond. As a result, the life-cycle environmental impacts from this corn ethanol are probably significantly less than for ethanol produced elsewhere because it is not resulting in deforestation or transported long distances before use. There may be regional economic benefits from production of ethanol in Windsor as well. Staff Recommendations Regarding Continued Use of Corn Ethanol in City Fleet The range of results referenced in this paper makes it difficult to determine whether the net environmental impacts of corn ethanol now are favorable or negative. While corn ethanol may offer reductions in GHG emission compared to gasoline, other alternative fuels offer greater GHG reductions on a per-gallon basis such as CNG (35% reduction) and LPG (41% reduction). However, there are only limited vehicle offerings in CNG fuel and a much wider array of vehicle types that can use ethanol. The City should carefully consider each vehicle purchase decision to find the optimal balance of life cycle costs, air pollution impacts and net greenhouse gas emissions while using the smallest vehicle application practical to meet the user needs. Since the City has already invested in ethanol through the acquisition of about 100 ethanol capable vehicles and the installation of an E85 fueling station, since ethanol currently represents a very small percentage of total City fuel use, and since the ethanol used by City fleets is City of Fort Collins, Natural Resources Department May 27, 2010 9 produced locally, it is not recommended to completely abandon its use at this time. If the City were to completely stop using ethanol until cellulosic ethanol becomes available, GHG emissions would increase by 265 tons and we would use 24,000 more gallons of petroleum fuel, based on 2009 usage levels. If predictions hold true, the next decade will see improved methods of producing ethanol with more ethanol coming from cellulosic feedstocks, so the net environmental impacts are likely to improve. Accordingly, the City’s Legislative Policy Agenda calls for the City to “Support programs and policies that promote advanced low emission vehicle technology; and encourage or promote alternative fuels such as biodiesel, cellulosic ethanol, hydrogen and compressed natural gas.” The City should also continue efforts to reduce the GHG emissions from transportation through “demand management” approaches such as efforts to reduce the amount of driving and unnecessary idling. In summary, staff recommends that the City continue using E85 vehicles and fuels until other alternative fuels and vehicles become locally viable. The City should annually evaluate whether new CNG vehicle options or other clean fuels choices have become available to meet the City's goals. It is anticipated that cellulosic ethanol may be locally available by the middle of this decade. References 1 Source: http://en.wikipedia.org/wiki/Corn_ethanol 2 Estimating the Net Energy Balance of Corn Ethanol Hosein Shapouri, James A. Duffield, and Michael S. Graboski Agricultural Economics Report No. (AER721) 24 pp, July 1995 www.ers.usda.gov/publications/aer721/ 3 Hill, Jason; Nelson, Erik; Tilman, David; Polasky, Stephen; and Tiffany, Douglas (July 25 2006). "Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels". Proceedings of the National Academy of Sciences 103 (30): 11206–10. doi:10.1073/pnas.0604600103. PMID 16837571 4 Green Dreams: Making fuel from crops could be good for the planet—after a breakthrough or two. Joel K. Bourne, Jr., National Geographic, October 2007. Retrieved from http://ngm.nationalgeographic.com/2007/10/biofuels/biofuels-text on April 5, 2010 5 Pimentel, David and Patzek, Tad. Ethanol Production Using Corn, Swithcgrass and Wood: Biodiels Prodcution using Soybeans and Sunflower. Natural Resources Research, Vol. 14:1, 65-76. March 2005 6 Source: http://en.wikipedia.org/wiki/Ethanol_fuel_energy_balance#cite_note-10 7 Ethanol Can Contribute to Energy and Environmental Goals Alexander E. Farrell, Richard J. Plevin, Brian T. Turner, Andrew D. Jones, Michael O’Hare, Daniel M. Kammen 506 27 January 2006 vol 311 Science City of Fort Collins, Natural Resources Department May 27, 2010 10 8 “Ethanol Production, Distribution and Use”. Presentation by NREL to Rocky Mountain Fleet Managers Association, May 14, 2008. Source: http://www.colorado.gov/energy/images/uploads/pdfs/BiofuelsScienceResponse.pdf 9 Source: http://www.colorado.gov/energy/index.php?/renewable/ethanol 10 Updated Energy and Greenhouse Gas Emissions Results of Ethanol Fuel. Presentation by Michael Wang, Argonne National Lab, September 2005. Source: http://www.transportation.anl.gov/pdfs/TA/354.pdf 11 EPA Lifecycle Analysis of GHG Emissions for Renewable Fuels. EPA-420-F-10-006. February 2010. Source: http://www.epa.gov/otaq/renewablefuels/420f10006.pfd 12 M. Wang, C. Saricks, D. Santini. "Effects of Fuel Ethanol Use on Fuel-Cycle Energy and Greenhouse Gas Emissions" (PDF). Argonne National Laboratory. http://www.transportation.anl.gov/pdfs/TA/58.pdf. Retrieved 2009-07-07. 13 M. Wang. "Energy and Greenhouse Gas Emissions Effects of Fuel Ethanol" (PDF). http://www.transportation.anl.gov/pdfs/TA/271.pdf. Retrieved 2009-07-07. 14 Land Clearing and the Biofuel Carbon Debt", Tilman http://www.nature.org/initiatives/climatechange/files/land_clearing_and_the_biofuel_carbon_debt.pdf 15 "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land Use Change”, http://www.whrc.org/resources/published_literature/pdf/SearchingeretalScience08.pdf 16 Biofuels Are Bad for Feeding People and Combating Climate Change, By David Biello, February 7, 2008. http://www.scientificamerican.com/article.cfm?id=biofuels-bad-for-people-and-climate 17 “New Studies Portray Unbalanced Perspectives on Biofuels”, DOE Response. Source: http://www.colorado.gov/energy/images/uploads/pdfs/BiofuelsScienceResponse.pdf 18 “Indirect Emissions from Biofuels: How Important?” Jerry M. Melillo, John M. Reilly, David W. Kicklighter, Angelo C. Gurgel, Timothy W. Cronin, Sergey Paltsev, Benjamin S. Felzer, Xiaodong Wang, Andrei P. Sokolov, C. Adam Schlosser http://www.sciencemag.org/cgi/content/abstract/1180251 19 “Feds conclude corn-based biofuels help reduce emissions, in contrast to California regulators, who said they don't. Who's right? Oddly enough, both may be”, By Douglas Fischer, Daily Climate. February 12, 2010 Source: http://wwwp.dailyclimate.org/tdc-newsroom/2010/02/ethanols-contrasting-carbon- footprints 20 The State of Food Production and Agriculture 2008: Biofuels: Prospects, Risks and Opportunities. Food and Agriculture Organization of the United nations. Rome, 2008. Source: http://www.fao.org/docrep/011/i0100e/i0100e00.htm City of Fort Collins, Natural Resources Department May 27, 2010 11 21 “Study warns of health risk from ethanol”, Keay Davidson, Chronicle Science Writer, Wednesday, April 18, 2007. Source: http://www.sfgate.com/cgi- bin/article.cgi?file=/c/a/2007/04/18/MNG7EPAN601.DTL#ixzz0kS1TSluU 22 Hill, Jason, Stephen Polasky, Erik Nelson, David Tilman, Hong Huo, Lindsay Ludwig, James Neumann, Haochi Zheng, and Diego Bonta. "Climate change and health costs of air emissions from biofuels and gasoline.(SUSTAINABILITY SCIENCE)(Author abstract)." Proceedings of the National Academy of Sciences of the United States 106.6 (Feb 10, 2009): 2077(6). Expanded Academic ASAP. Gale. BENTLEY UPPER SCHOOL LIBRARY (BAISL). 6 Oct. 2009 23 Water Implications of Biofuels Production in the United States, by the Committee on Water Implications of Biofuels Production in the United States, National Research Council, 2008. Text from http://news.mongabay.com/bioenergy/2007/10/report-increase-in-first-generation.html 24 Ethanol Benchmarking and Best Practices. The Production Process and Potential for Improvement. Minnesota Technical Assistance Program. March 2008. (Source: http://www.mntap.umn.edu/MnTAP%20Ethanol%20Report.pdf) 25 “Ethanol Production, Distribution and Use”. Presentation by NREL to Rocky Mountain Fleet Managers Association, May 14, 2008. Source: http://www.colorado.gov/energy/images/uploads/pdfs/BiofuelsScienceResponse.pdf 26 Source: http://www.americanthinker.com/2009/03/obamas_energy_policy_will_incr.html 27 Source: http://www.scientificamerican.com/article.cfm?id=ethanol-corn-climate 28 Draft Regulatory Impact Analysis: Changes to Renewable Fuels Policy. EPA-420-D-09-001, May 2009. Source: http://www.epa.gov/otaq/renewablefuels/420d09001.pdf 1 1 City’s Use of E85 Corn-Ethanol City Council Work Session November 8, 2011 2 Questions for Council to Consider 1. Should the City continue its approach to E85? • Alt. 4: Increase use of E85 2. If not, which of the other three alternatives do you prefer? • Alt. 1: Stop using ethanol • Alt. 2: Continue using at current levels only • Alt. 3: Switch from E85 to E50 3. Do you need more information? ATTACHMENT 5 2 3 The Issue Member(s) of Council raised questions about the City’s use of a corn-based fuel (E85) based on the social implication of using corn as a fuel source. Possible Fuel-based Alternatives 1. Stop using ethanol 2. Continue using ethanol at current levels only 3. Switch from E85 to E50 4. Increase use of E85 (recommended by AQAB) 4 Sources of Ethanol Corn ethanol • 13.2 billion gallons produced in USA in 2010. • Ethanol market share in gas supply grew from 1% in 2000 to 10% in 2010. Sugar ethanol • Brazil is the largest producer of sugar ethanol • No sugar ethanol plants in the U.S. Cellulosic ethanol • Produced from wood, grasses, or the non-edible part of plants 3 5 Renewable Fuels Standard 2 2022 16.0 36.0 2021 13.5 33.0 2019 8.5 28.0 2017 5.5 24.0 2015 3.0 20.5 2014 1.75 18.15 2013 1.0 16.55 2012 0.5 15.2 0.25 13.95 2011 0.0066 Cellulosic Total Year biofuel 6 Renewable Fuels Standard 4 7 Outline 1. City policies 2. Approaches to address City policy 3. Existing City use of E85 (vehicles, stations) 4. Impacts of Corn Ethanol 5. Analysis of Alternatives 6. Board Recommendation 8 City policies Reduce GHG emissions from municipal operations at least 2 % in order to achieve a reduction of 20% below 2005 levels by 2020; ultimately to achieve carbon neutrality for the municipal organization. Reduce traditional fuel use by the City’s vehicle fleet by 20% by 2020 Reduce dependence on foreign oil (Administrative Policy 5.2 C1) 5 9 City Plan policy Policy ENV 9.1 – Promote Alternative and Efficient Transportation Fuels and Vehicles Promote alternative and efficient transportation fuels and vehicles that improve air quality. Invest in infrastructure throughout the City to support alternative fuel vehicles and promote the use of such vehicles through education and incentives. 10 City policies Legislative Policy Agenda 2011 Support programs and policies that promote advanced low emission vehicle technology; and encourage or promote alternative fuels such as biodiesel, cellulosic ethanol, hydrogen and compressed natural gas. 6 11 Approaches to address City policies Driving Behavior Vehicle Fuel Efficiency Carbon Intensity of Fuel 12 City Vehicle Purchasing Policies Vehicle purchasing hierarchy 1. Hybrid 2. Alternative fueled 3. Down-size vehicle Purchase an alternative fuel vehicle if: • Fueling infrastructure is in place • Job application fits OEM vehicle • Economics are beneficial to City (considers life cycle) • Vehicle meets needs of department 7 13 Alt. Fuel Vehicle Suitability & Availability Propane CNG PHEV Hybrid Electric Flex Fuel Bio- diesel Fuel Efficient Incremental Cost $8-10K $50-60K busses; $5K vans $8-9K $2-4K na zero zero na Busses XX Staff cars X X X X Patrol X Pickups X X X X Hvy trucks X 14 Fort Collins 2010 Fuel Usage Biodiesel 38% Propane 1% Unleaded 36% E85 8% (62,000 gallons) CNG 12% Diesel 1% 8 15 City E85 Use City Fleet E85 Use 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 200520062007200820092010 Gallons 16 City E85 Use 96 flex-fuel, E85-capable vehicles 7 Local E85 fueling stations • Poudre Valley Fuel Co-op on East Mulberry • Western Convenience on West Drake Road • Western Convenience on Jefferson St. • City Fleet Shop on Wood Street • Fossil Creek Park • Spring Canyon Park • Police Services 9 17 City E85 use 18 Costs Fuel E85 price varies around $3/gallon Unleaded prices varies $3- $4/gallon E85 is only 2/3-3/4 as fuel efficient as gasoline “Break even” point varies with fuel costs and vehicle Flex Fuel vehicles No added cost for flex fuel vehicles Fueling Infrastructure Governor’s Energy Office grant for $30K funded 2 City ethanol fueling stations 10 19 E85 Tailpipe Benefits (gm/mi)* • 17-23% reduction in CO2 (carbon dioxide) • 20% reduction in CO (carbon monoxide) • 30% reduction in PM (particulate matter) • 18% reduction in NOx (nitrogen oxides) (up to 50% in non-FFV) • Reduction in aromatics (benzene, 1,3 butadiene) • (Increase in aldehydes; formaldehyde 50% increase) *Source: Dept. of Energy’s Alternative Fuels & Advanced Vehicle Data Center 20 E85 – Other Air Quality Benefits Evaporative E85 Reid Vapor Pressure lower than gas Ground level ozone VOC contribution to ground level ozone less than gas (Source: AWMA, Yanowitz, V59, Feb 2009) 11 21 Energy Balance Compares the amount of fossil energy used to make ethanol against the total amount of energy released when it is burned. • Ethanol: + 1.24 (positive) • Gasoline: - 1.23 (negative) 22 (BTU/gallon burned minus BTU/gallon to make it) 12 23 Greenhouse Gas Emissions U.S. Dept. of Energy – corn ethanol life cycle emissions are 20% lower than gasoline Obama administration – corn ethanol will meet RFS low carbon fuel definition (lifecycle emissions are at least 20% below 2005 gas or diesel) by 2022. California - rejected corn ethanol as a strategy to mitigate its carbon emissions based on current lifecycle emissions. 24 Water Impacts of Growing Corn Expanding biofuel crops into dry areas will greatly increase pressure on water resources. (Nat’l Research Council 2008) Nitrogen fertilizer for biofuels contributes to high nitrogen in streams and ground water (ecosystem nitrification and human/anima health problems). Ethanol production itself uses water and releases phosphorous and chlorine. Increased ethanol production could impact Ogallala Aquifer resources. (Enviro. Defense 2007) 13 25 Land Use Impacts of Growing Corn Clearing new land for biofuel crops will release more carbon into the air than was previously sequestered in the soil and plants. More corn gown here means less soy, so more land/rainforests cleared in other countries for soy, with associated carbon release from deforestation. Increased corn production can lead to reduced crop rotation and depleted soil nutrients due to over- farming. 26 Impact of corn-based fuel on food prices World Bank attributes 70% of food price rise in 2007- 2008 to biofuel crop expansion. Council of Economic Advisors (2008) attributes 20% of food price rise in 2007-2008 to US biofuel crop expansion; 35% to global corn ethanol production. Congressional Budget Office (2009) attributes 10-20% of food price rise in 2007-2008 to biofuel crop expansion. 14 27 Capacity of US to produce corn ethanol 2001 - ~ 7% of US corn crop used for ethanol (CRES) 2009 – 26% US grain crop used to produce ethanol 2017/2018 – estimated 33% of US corn crop used to produced ethanol 28 Alternatives Analysis 1. Stop using ethanol • Increase City GHG inventory ~ 525 MTCO2 (1.2%) • Increase air poll’n emissions that contribute to ozone • Reduce certain air toxics (aldehydes) • Might have to pay back GEO $30,000 for stations • Will not grow ethanol infrastructure • Will use more imported fuel (unleaded) unless another alternative found 15 29 Alternatives Analysis 2. Continue using ethanol at current levels only • Lose future potential to reduce GHG and air pollution emissions thru expanded E85 use • May end up paying higher total fuel costs if unleaded price rises and E85 does not. 30 Alternatives Analysis 3. Switch from E85 to E50 • E50 can be made available locally at no extra cost • Increase carbon emissions 275 MTCO2 • Keep grant money from GEO for E85 station • Maintains support for ethanol infrastructure so we can take advantage of cellulosic ethanol when commercially available 16 31 Alternatives Analysis 4. Increase use of E85 • Realize greater carbon reductions • Keep grant money from GEO for E85 station • Supports investment in ethanol infrastructure to take advantage of cellulosic ethanol when commercially available 32 City white paper statement July 2010 • Corn ethanol provides a near-term way for the City to reduce its fleet GHG emissions, and its use is considered reasonable as a transition strategy until more sustainable biofuels are locally available. To exit from the use of corn-based ethanol, the City will routinely evaluate whether other clean fuels choices have become available to meet the City's goals. 17 33 AQAB Recommendation • To continue to use E85 as an alternative fuel on the current trajectory • To encourage staff to continue to look for options and alternatives to traditional oil-based fuel sources • To develop and implement a plan to encourage EcoDriving • To maintain the City’s focus to reduce GHG and meet the goals of the Climate Action Plan (Motion passed unanimously ) 34 Questions for Council to Consider 1. Should the City continue its approach to E85? • Alt. 4: Increase use of E85 2. If not, which of the other three alternatives do you prefer? • Alt. 1: Stop using ethanol • Alt. 2: Continue using at current levels only • Alt. 3: Switch from E85 to E50 3. Do you need more information?