Weekly Clean Energy Roundup:July 21, 2006

News and Events

• G8 Leaders Address Global Energy Security and Climate Change
• U.S. Fuel Economy for Cars and Light Trucks Holds Steady in 2006
• IRS Certifies Honda Civic GX and GM Hybrids for Tax Credit
• Rhode Island Approves Bills to Encourage Efficiency and Renewables
• New Michigan Laws Promote Renewable Fuels and Biomass Energy
• Reports Note Benefits and Limitations of Using Biofuels

Energy Connections

• First Half of 2006 is Warmest on Record for the United States

News and Events

G8 Leaders Address Global Energy Security and Climate Change

President George W. Bush joined the leaders of the seven other large industrialized democracies in a commitment to address global energy security and climate change at the G8 Summit on Sunday. The G8 leaders?representing the United States, Britain, Canada, France, Germany, Italy, Japan, and Russia?adopted a Plan of Action that addresses a global energy security, including energy efficiency and renewable energy. The plan also notes that the G8 members “will continue to work to reduce greenhouse gases and deal effectively with the challenge of climate change,” listing a number of international initiatives to accomplish that goal. According to the plan, the Kyoto Protocol and other initiatives “are the foundation of our current efforts to address climate change, and will form the basis of an inclusive dialogue on further action in the future, including the period beyond 2012.”

For energy efficiency, the Plan of Action calls for improving national energy statistics; considering national goals for reducing the energy intensity of economic activity; encouraging energy efficiency standards and labeling for products; promoting efficient technologies through financial incentives; demonstrating leadership through energy efficient government buildings; increasing public awareness of energy efficiency; and encouraging the increased involvement of the Global Environment Facility, the World Bank, and other multilateral development banks in funding energy efficiency projects. Since two thirds of the world’s oil is consumed by transportation, the plan calls for sharing best practices for fuel efficiency; providing incentives for efficient vehicles; introducing large-scale efficient public transportation; promoting a diversity of vehicle fuels and technologies, including hydrogen fuel cells; and promoting a wider adoption of efficient engines, lightweight materials, and aerodynamic designs. The plan also calls for greater energy efficiency in oil and gas production.

For renewable energy, the G8 leaders reaffirmed their commitment to implement measures set out in the Gleneagles Plan of Action that the leaders established in 2005. The leaders also affirmed their support for the transition to a hydrogen economy. Renewable energy and hydrogen are parts of a G8 effort to diversify the world’s energy mix, an effort that also includes the development of zero-emission fossil fuel power plants, nuclear energy, and other innovative energy technologies. Other measures included in the global energy security plan include improving global energy markets, encouraging energy investments, securing critical energy infrastructure, and helping the poor to deal with high energy costs. See the new Plan of Action and the 2005 Gleneagles Plan of Action on the G8 Web site.

U.S. Fuel Economy for Cars and Light Trucks Holds Steady in 2006

As automakers prepare to release their model year 2007 cars and light trucks, the U.S. Environmental Protection Agency (EPA) notes that this year’s cars and trucks averaged 21.0 miles per gallon (mpg), unchanged from the year before. Average fuel economies hit their peak at 22.1 mpg in model year 1987, then slid over the following five years. According to the EPA, a trend toward faster and heavier vehicles is balancing out gains in fuel efficiency, and since 1992, the average fuel economy of new U.S. cars and light trucks has remained relatively constant. Recent technology developments, such as hybrid-electric vehicles, clean diesel technology, improved transmission designs, and engines equipped with variable valve timing and cylinder deactivation, hold promise for stable or improving fuel economy in the future, depending on whether light trucks maintain their popularity. EPA estimates the average fuel economy based on sales projections from automakers, which are expecting light trucks (vans, sport utility vehicles, and pickup trucks) to account for half the vehicle sales for the current model year. See the EPA press release or go directly to the report.

Recent trends in vehicle sales show decreasing sales of light trucks and increasing sales of cars, including subcompacts and hybrids. With the year half over, light truck sales have dropped by 6.3 percent compared to last year, according to Motor Intelligence, an online automotive data source. Passenger car sales have gained 2.5 percent over last year’s sales, but light trucks are still outselling passenger cars. Passenger cars made up 47.5 percent of sales for the first half of this year, compared to 45.3 percent of sales for the first half of 2005. See the “New Vehicle Sales” report on the Motor Intelligence Web site.

Meanwhile, American Honda Motor Company is reporting strong sales of its Civic Hybrid and new Fit subcompact, while Toyota Motor Sales is reporting strong sales of its Prius, Camry Hybrid, and Yaris subcompact. Ford Motor Company’s results are representative of domestic automakers, with a 7 percent increase in car sales and a 14 percent decrease in light truck sales, compared to last year. Ford blames high gasoline prices, and notes that although truck-based SUVs have seen declining sales over the past four years, a decline in large pickup sales occurred relatively recently. See the press releases from Honda, Toyota, and Ford.

IRS Certifies Honda Civic GX and GM Hybrids for Tax Credit

For those looking to buy hybrids and alternative fuel vehicles, the U.S. Internal Revenue Service (IRS) has just announced new vehicle certifications for the Alternative Vehicle Tax Credit, including hybrid pickups from General Motors Corporation (GM); GM’s 2007 Saturn Vue Green Line, a new hybrid SUV that hasn’t hit dealerships yet; and the Honda Civic GX, which runs on compressed natural gas (CNG). But be careful if your employer offers a cash incentive for buying a hybrid, since the IRS considers that taxable income. See the IRS press releases on the GM hybrid pickups, the Saturn Vue Green Line, the Honda Civic GX, and employer cash incentives, and for more information, see the IRS list of all vehicles certified for the tax credit.

Rhode Island Approves Bills to Encourage Efficiency and Renewables

Rhode Island Governor Donald Carcieri approved an energy bill in late June that will encourage the use of energy efficiency, renewable energy, and distributed energy systems. Distributed energy systems are small power systems located on or near a customer’s property, often owned by the customer, and connected to the power grid. The law requires the state’s Public Utilities Commission (PUC) to set new standards for procuring energy from diverse sources, including renewable energy systems, distributed energy systems, and demand response (technologies to reduce power demand when the power grid is near its capacity). To encourage the use of these energy resources, the PUC can set special rates and can also establish net metering standards. The PUC must also set standards for including energy efficiency and energy conservation measures when utilities attempt to procure energy at the lowest cost. In addition, the state will set new criteria to facilitate the siting of renewable energy facilities.

By 2008, each utility in the state has to submit plans for procuring these energy resources, including goals and target percentages for each resource, and will then have to update their plans every three years. To help establish long-term energy plans, the state will also create a new Office of Energy Resources. In addition, the state’s gas distribution companies will support a new fund to support cost effective energy efficiency, energy conservation, combined heat and power systems, and weatherization services for low-income households. See the governor’s press release or go directly to the full text of the bill (PDF 146 KB).

Governor Carcieri also signed S 2844 on June 23rd, requiring the PUC to establish new energy efficiency standards for residential boilers and furnaces, incandescent spot lights (also called “reflector lamps”), bottled water dispensers, commercial hot food holding cabinets, and walk-in refrigerators and freezers. The PUC must adopt regulations to establish the new efficiency standards by June 1st of next year. See the full text of the bill (PDF 42 KB).

New Michigan Laws Promote Renewable Fuels and Biomass Energy

Michigan Governor Jennifer Granholm approved on July 7th a package of bills to encourage the use of renewable fuels within the state. The seven-bill package includes a measure to lower taxes by 20 percent on diesel blends containing at least 5 percent biodiesel (“B5”) and by 36 percent on gasoline blends containing 70 percent ethanol or more (the most common blend, E85, contains 85 percent ethanol). One law requires all state motor transport facilities to add biodiesel and E85 pumps, while another creates matching grants for adding biodiesel and E85 fuel pumps at service stations and for adding infrastructure at fuel terminals. Two laws work together to allow the establishment of up to 10 “renaissance zones” that will provide tax breaks for biomass energy facilities of all kinds and for agricultural and forest product processing facilities, including those that would serve the biomass energy industry. And a final law establishes a renewable fuels commission with the state’s Department of Agriculture to help advance renewable fuels. See the governor’s press release and the full text of Act 268 (PDF 35 KB), Act 269 (PDF 32 KB), Act 270 (PDF 33 KB), Act 271 (PDF 44 KB), Act 272 (PDF 33 KB), Act 273 (PDF 34 KB), and Act 274 (PDF 34 KB).

Reports Note Benefits and Limitations of Using Biofuels

New reports from a variety of sources are reaching m
ixed conclusions about biofuels, although overall the outlook is positive. The Worldwatch Institute published a report in June that says biofuels supplied 1 percent of the global transport fuel market last year, with production doubling since 2001. The report concludes that biofuels are poised for strong growth and could provide 37 percent of U.S. transport fuel by 2030. Although the report warns of potential agricultural and ecological risks from large-scale use of biofuels, it also notes that the long-term potential of biofuels is in the use of non-food feedstock that include agricultural, municipal, and forestry wastes as well as fast-growing, cellulose-rich energy crops such as switchgrass. See the Worldwatch Institute press release, which links to the report.

At the same time, a study from the University of Minnesota concludes that although corn ethanol yields a net energy benefit, the benefit is much greater for biodiesel. Corn ethanol delivers 25 percent more energy than is used in its production, says the study, while biodiesel from soybeans generates 93 percent more energy than is used in its production. The study also notes the limitations of both fuels: if all of the corn produced in the United States were converted to ethanol, it would replace only 12 percent of our gasoline use, while the entire soybean crop could only replace 6 percent of our diesel fuel. Like the Worldwatch Institute, the University of Minnesota researchers look to non-food plants that can grow on marginal lands with minimal input of fertilizers and pesticides as the best hope for biofuels. The study was published online by the Proceedings of the National Academy of Sciences (PNAS) on July 12th. See the University of Minnesota press release and the abstract on the PNAS Web site.

Finally, a new report from the U.S. Department of Agriculture (USDA) examines the feasibility of producing ethanol from sugar, a process used heavily in Brazil. The report concludes that it is economically feasible to produce ethanol from molasses, but it may be difficult to find a large enough molasses supply in one area to support an ethanol plant. Producing ethanol from sugar cane, sugar beets, or raw or refined sugar is questionable, however, since it costs twice as much as producing ethanol from corn. See the USDA report (PDF 367 KB).

Energy Connections

First Half of 2006 is Warmest on Record for the United States

At the halfway point, 2006 is shaping up to be the warmest year on record for the United States, according to the National Oceanic and Atmospheric Administration (NOAA). Based on preliminary data, the average January to June temperature for the contiguous United States was 51.8 degrees Fahrenheit, which is 3.4 degrees F above the average temperature during the 20th century. The heat is taxing electrical power systems while a continued drought is depleting hydropower resources. In June, 45 percent of the contiguous U.S. was in moderate to-extreme drought, an increase of 6 percent from May, while 27 percent was in severe-to-extreme drought, an increase of 7 percent from May. This year is also shaping up to be the sixth warmest on record for the globe, with January to June average temperatures at 0.9 degrees F above the 20th-century mean. See the NOAA press release and the full analysis from NOAA’s National Climatic Data Center.

In case you haven’t noticed, July is turning out to be a warm one as well, with a heat wave setting records across much of the country. So far, U.S. utilities are meeting the challenge without any major power disruptions, although many are calling on their customers to conserve energy. Electricity supplies are strained and new electrical demand records are being set from coast to coast. But don’t take our word for it, see the press releases from the Long Island Power Authority and the California Independent System Operator (PDF 26 KB).

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