HB 41 Clean Transportation Fuel Standards Act
- The heart of the proposal rests on two things: the carbon-intensity standard and the transportation fuel credits. Both have to be set at appropriate levels to generate significant interest as well as lower overall transportation fuel carbon intensity to meet specific and meaningful long-term climate goals. They need to be adjusted regularly (credits annually per the Act) to ensure that they continue to drive down transportation fuel carbon intensity
- This process is complicated and requires specific expertise in generating the initial standards; “generating, obtaining, trading, selling and retiring” (Act language) credits; setting subsequent annual standards and credit levels; and needs to be based on data free from political interference. Failure to set appropriate standards that actually reach stated goals, and to get the price right on credits are the two issues that plague these sorts of initiatives. NM needs to pay attention to – and perhaps collaborate with – other state’s credit programs, as well as any federal credit program in order to avoid competition that could interfere with New Mexico’s program.
- Biomass cannot be economically transported long distances, so biofuel production facilities rely on feedstocks produced relatively close to the ethanol refinery. The Act opens the likelihood of substantial clean transportation fuel imports into New Mexico from places with substantial and reliable ethanol feedstocks, like midwest corn.
- The Act has no specifics on feedstocks and how they will be produced, so a lot of attention will be needed to make sure any sources and methods are thoroughly analyzed for life cycle carbon intensity, including impacts on land use from converting to feedstock production or diverting some or all existing land use to ethanol production
- On the use of forest biofuels: The Act does not mention this source of alternative clean transportation fuel, in keeping with its “technology neutral” approach. However, NMED included a map (see next page) of New Mexico’s Clean Fuel Feedstock Assets, which shows substantial “Forest Land” resources in the state. This resource could include forest thinning and other projects carried out by tribes and pueblos, land grants and other land-based communities, as requested by them after the recent massive fires. This could provide additional local income in addition to improving forest and watershed health. But ethanol production could be used to allow large scale corporate logging and biofuel-directed “plantations” of fast-growing arid land adapted grasses, shrubs and trees
- On the use of dairies for biofuel: The same map shows dairies as a source of clean fuel feedstock. There has been occasional interest by individual dairies to get funding to install manure waste digesters in order to deal with their large waste problem but primarily to lower operating costs by using the methane to generate on-site energy. In 2021, dairy methane production surpassed landfills as the largest source of US biogas. This is being driven, in part, by the rise of biogas credits that can be as much as $1000 per cow. An average New Mexico dairy with 3000 cows could reap $3 million in credits, but the largest share would go to the manure digester company that installs and operates the digester, cleans the resulting gas of unwanted constituents, and gets it into the pipeline distribution system. However, in order to use dairy manure as a transportation fuel, the methane has to be further converted into ethanol. This is an energy-intensive and complicated process. It is much more likely that dairy-based methane production would be used to fuel ethanol production using a different feedstock, such as corn (see this article on a Nebraska operation). The dairy methane is cheaper than fossil fuel-based methane, but there are still issues with leakage and proper accounting for life-cycle costs.
- As an aside: Brazilian car manufacturers introduced flex-fuel vehicles in 2003 and they accounted for 94% of new car sales in 2013. Flex-fuel cars run on a mix of E20-E25 – 20-25% ethanol in a blend with gasoline all the way up to 100% ethanol (Although normally the ethanol tops at about 95%, with additives to improve performance). E20-25 has generally been the government-mandated range for ALL light vehicle fuel sold in the country, although it has varied outside this range for various reasons. Ethanol prices at the pump vary widely between 15-40% less than gasoline (low ethanol blended) based on observations while visiting here. Pricing of ethanol for fuel relative to the gasoline blend has been a delicate balancing act here, as has the relative share of sugarcane production going to ethanol vs sugar and other products (it appears to hover around a 50/50 split most of the time). A shortage of sugarcane for ethanol has led to the use of corn feedstock as well. According to one analysis I read, while ethanol is typically cheaper at the pump, it costs slightly more in terms of cost per mile; this could be from greater evaporation of the ethanol – this is an issue in the US with the ethanol blends – and the effect of the additives (water makes up several percent of the “pure” ethanol, along with other additives). There is also an issue here of operators diluting the ethanol. There is no vehicle performance difference. The US EPA considers Brazilian sugarcane ethanol an advanced biofuel because it has 61% less life-cycle GHG emissions than gasoline, including direct emissions and indirect land use change (ILUC) emissions. As in Brazil, in the US, these concerns need attention: relative pricing of alternative transportation fuels and the effects on consumer preference; impacts from ethanol production on other alternative fuels feedstock uses and vice versa (corn is the major source in the US; soy is the major source for diesel alternatives in the US and Brazil); and the need for adjustments to older car engines to deal with higher ethanol content (apparently a relatively minor adjustment in Brazil – I remember the campaign to get people to come in and have it done before the big switch in 2003)