The document discusses biofuels and their benefits over gasoline. Biofuels emit fewer greenhouse gases than gasoline from oil, are made from renewable sources, and can help reduce dependence on oil and greenhouse gas emissions. The key types of biofuels discussed are first generation corn ethanol and second generation advanced biofuels like cellulosic ethanol and algae fuel.

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2. Definitions and Benefits
 Biofuels are a type of transportation fuel whose energy is derived
from biomass conversion, as well as solid biomass, liquid fuels and
various biogases.
 Biofuels are gaining traction as a transportation fuel because of:
 oil price hikes
 the need for increased energy security
 concern over greenhouse gas emissions from fossil fuels
 support from government subsidies
 Biofuels emit fewer greenhouse gases than gasoline refined from oil.
 They are made from renewable sources.
 Key Takeaway: Biofuels can play a key role in reducing our
dependence on oil and reducing greenhouse gas emissions.
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3. Biofuels: 1st and 2nd Generation
1st Generation 2nd Generation
 The most commercially  Advanced or Next
viable biofuel today is grain Generation
ethanol (corn or sorghum).  Algae fuel
 90% of gasoline today  Cellulosic ethanol (made
contains 10 percent ethanol from wood chips, corn cobs,
(E10). EPA recently corn husks, citrus waste)
approved the use of 15%  Biodiesel (Used mainly in
ethanol in our vehicles Europe and in busses)
(E15).  Reduces greenhouse gas
 In 2011, the U.S. produced emissions by 86%.
more than 13 billion gallons  Cellulosic ethanol
of ethanol (the vast majority production is predominantly
corn based). in pilot phase.
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4. Food Vs. Fuel
 In 2008, the Grocery  A by-product of ethanol production
Manufacturers Association (GMA) is Distillers Grains, a nutritious
launched a smear campaign to feed for animals.
blame the rising cost of food on  Approximately a third of every bushel
American ethanol producers. of grain that goes into ethanol is
returned as Distillers Grains.
 Studies have found that the
causes of food spikes in 2008
were due to:  Key Takeaway: Grain ethanol
 speculation in the commodity market production has a small impact
 high oil prices on food prices but the main
 the cost of shipping and manufacturing driver is non-commercial
speculation and high oil prices.
 Ethanol is made from Yellow 2
corn which is used primarily for
Cellulosic and advanced
animal feed. ethanol will not compete with
any food or feed sources.
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5. Subsidies and the RFS
 The Volumetric Ethanol Excise Tax Credit (VEETC)
 Subsidized the production of ethanol in the United States.
 Originally set at $0.54/gallon to offset the $0.54 ethanol
tariff on imported ethanol, then reduced to $0.45/gallon.
 The VEETC and import tariff were completely eliminated
on December 31, 2011.
 The Renewable Fuel Standard (RFS)
 2005 Standard required 7.5 billion gallons of transportation
fuel to come from renewable sources by 2012.
 The Energy Independence and Security act of 2007 set a
goal of 36 billion gallons of renewable fuel by 2022 (21
billion gallons must be from advanced or cellulosic ethanol,
15 billion from grain).
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6. Future of the RFS
 The RFS has been attacked by Key Takeaway: The RFS has been
Big Oil as an “ethanol mandate”. critical driver of innovation and
investment in next generation
 RFS is only energy policy in place ethanol. Eliminating RFS will send
to reduce dependence on oil. wrong signal to investors.
 Billions of dollars have been
invested in advanced biofuels with
the expectation that Congress will
stay committed.
 Dismantling the RFS would choke
funding for advanced ethanol
production.
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7. Challenges and Opportunities
 The Blend Wall: Majority of cars on the road can only run on gasoline with
E10. Vast majority of our gas stations only dispense gasoline with E10.
Ethanol industry is producing more ethanol than it can legally dispense.
 Solutions:
 Short Term Fix: E15
 Long Term Fix: Flex Fuel Vehicles and Flex Fuel Pumps
 A full move to E15 temporarily alleviates blend wall problem by opening up market to
more ethanol (1st and 2nd generation).
 Flex Fuel Vehicles run on higher level blends of ethanol (E0 to E85). Flex
Fuel Pumps dispense these levels. U.S. Auto Makers have committed to
building more Flex Fuel vehicles at the same time that U.S. ethanol trade
groups are working to put more Flex Fuel pumps in the ground.
 Choice at the pump will create competition in the fuels market, reduce
prices and break Big Oil’s monopoly on the fuels market.
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9. Energy efficiency is about
using electricity, natural gas, and liquid fuels
more wisely to
improve the nation’s energy
security, economic
competitiveness, and
environment
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10. Energy efficiency in the buildings sector represents a
largely uptapped economic opportunity
“
An upfront
investment of $520 billion
by 2020 would
unlock $1.2 trillion in energy savings.
…but only if the nation can craft a
”
comprehensive and innovative approach to
unlock it.
- McKinsey analysis from
“Unlocking Energy Efficiency in the U.S.
Economy”
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11. President Obama has focused heavily
on energy efficiency
 Make non-residential
buildings 20% more
efficient by 2020
 Reduce greenhouse
gas emissions by 17%
by 2020 and 83% by
2050 (compared to
2005 levels)
 Reduce oil imports by
one-third by 2025
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12. Buildings consume 40% of the nation’s energy
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13. The Administration works to improve
efficiency in the residential, commercial,
vehicles market through:
• industrial and funding research and
development of new technologies,
• Setting energy performance
standards for appliances, and
• supporting states in policy
development
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14. The states are the leaders in setting policies to
improve energy efficiency
More than 30 states
have legislated or
voluntary targets for
efficiency
improvements that
the utilities are
directed to achieve
state-wide.
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15. Increasing vehicle efficiency is the most effective
near- and mid-term policy solution to reducing oil
consumption
 INSERT Graphic to demonstrate that 3 out
of every 4 barrels of oil goes into the
transportation sector
 INSERT Graphic to demonstrate that 80%
of oil use within transport goes into ground
transportation (as opposed to air or sea)
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16. Over the last 30 years, vehicle technology advances have
gone into making heavier & faster vehicles at the expense of
improving fuel economy
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17. Along with replacing fossil fuels with non-food-
based biofuels, the most effective strategies to
reduce fuel consumption are to:
• Improve efficiency through developing
advanced, lightweight materials
• Improve the efficiency of internal combustion
engines, and
• Electrify the vehicle fleet
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18. The Administration’s new fuel economy standards will improve our energy
security and result in large savings at the pump
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20. Electric and Hybrid Electric Vehicles
US Government subsidies of up to $7500 to per purchase (based on fuel
economy efficiencies) have improved electric and hybrid vehicle sales. In
addition, some states, such as California offer up to $5,000 in tax credits per
purchase to further enhance the value proposition.
Definitions:
 Electric Vehicle: A vehicle which contains no petroleum powered
internal combustion engine. Battery technology is utilized to store
the power used to propel the drive train.
 Hybrid Vehicle: A vehicle that combines petroleum and electric
power to propel the drive train. There is a spectrum of technologies
that alter the ratio of battery to petroleum utilized, and thus, the
emissions and fuel economy savings.
Different technologies yield different fuel economy / emission results:
Petroleum Parallel / Mild Series Plug-in
Internal Parallel Parallel Hybrid
Combustion Hybrid Hybrid Series Hybrid Electric Fuel Cell Electric
Engine Engine Engine Engine Engine Engine Engine
Electric / Hybrid Vehicle Spectrum
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21. There are multiple types of viable hybrid electric vehicle configurations
available, each with their own markets, benefits and challenges
Vehicle Type Description Example
Single electric motor is coupled with ICE  Honda Insight
(internal combustion engine). Electric motor  Honda CRZ
Parallel / Mild Parallel Hybrid
assists with acceleration. Regenerates during  Mercedes S400
braking BlueHYBRID
One electric motor coupled with one ICE motor.  Toyota Prius
Each are capable of powering the vehicle, and  Ford Escape
Series Parallel Hybrid each is used in different ratios as driving  Ford Fusion
conditions require as controlled by on-board
computer
Electric motor powers the drive train with a ICE  Chevy Volt
Series Hybrid or Extended
to power generators that feed power back into
Range Electric Vehicle (EREV)
the electric motor as conditions require
Similar to a Mild Parallel Hybrid with extended  Ford Escape Plug-in
Plug-in Hybrid Electric Vehicle
range electric capacities due to Lithium-ion  Honda Civic Plug-in
(PHEV)
batteries
Similar to Series Parallel however, instead of  Chevy Equinox FCEV
Fuel Cell ICE, a fuel cell engine is coupled with an  Ford Edge Hyseries
electric motor. Zero emission vehicle
Vehicle powered solely by an electric motor.  Tesla Motors
Electric Vehicle Currently range of vehicle per charge is limiting  Nissan Leaf
wide adoption. Zero emission vehicle.
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22. Not sure th
accurate an
There are currently two prevailing operating models for electric vehicles Just saw a
announcem
Currently, battery range per charge for vehicles remains below 50 miles the Focus E
for
most affordable electric vehicles. Tesla Motors has a luxury sedan that with 76mpc
boasts a 300 mile range per charge, however, it is priced well above the operational
median auto purchase price of $28,000 for over 1
Operating Model 1: Use and Recharge
After driving to destination, vehicle is plugged in to charge and is back on the road.
Current recharge times are 4-8hrs depending on voltage and battery depletion.
Operating Model 2: Battery Swap Out / Subscription
Drivers pull into battery changing stations to have battery removed and replaced.
Battery swap currently takes 5-10 minutes depending on model
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23. The greatest challenge to the viability of hybrid and electric vehicles lies
in the establishing lost cost supply-chain to meet consumer price points
The established automotive supply chain requires time to reach economies of scale
and experience to drive down the costs of hybrid / electric vehicles. However, as a
mature industry, the supply chain’s ability to adapt to changing consumer demands
should be realized by 2015.
A look at a typical automaker’s supply chain representing hundreds of thousands of jobs:
Auto Company
Manufacturer
Tier 1 Supplier Tier 1 Supplier Tier 1 Supplier Tier 1 Supplier
Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Tier 2
Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier
Hundreds of Tier 3 Suppliers feeding into Tier 2 Suppliers
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24. Electric vehicles are the key to reducing oil consumption and vehicle-
borne carbon emissions in the transportation sector
Electric and hybrid-electric vehicle technology have become viable
technologies for the personal transportation market and sales are expected to
reach 65% of all auto sales in 2030
16,000,000
14,000,000
12,000,000 Global Small Vehicle Sales
10,000,000
8,000,000
6,000,000
Global Electric Hybrid Sales
4,000,000
2,000,000
0
2012 2015 2020 2025 2030
Note: Based on 2009 McKinsey study of electric vehicle adoption rates and auto industry growth. Electric vehicle adoption
numbers verified by Becker/Sidhu UC Berkeley 2009 study: “Electric Vehicles in the United States”
By 2030, oil consumption is reduced by 18% of 2010 consumption levels. U.S. fleet turnover rate is
currently 12-15 years. At this projected rate, adoption is expected to accelerate beginning 2018.
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26. The U.S. imported 45% of its petroleum from
foreign countries in 2011
Nearly 69% of U.S. imports
originated from five countries
Rank Country Million bbl/d
1 Canada 2.2
2 Saudi Arabia 1.2
3 Mexico 1.1
4 Venezuela 0.9
5 Nigeria 0.8
Source: EIA, U.S. Imports by Country of Origin, 1/2007-12/2011
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27. Crude oil is produced in 31 U.S.
states and U.S. coastal waters.
Source: Energy Information Administration
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28. Oil is traded on a world market, and oil price
is impacted by global supply and demand
Demand for oil is expected to
grow, especially in Asia and
developing economies
Geopolitical events, such as the
Arab Spring and U.S. sanctions on
Iran, can lead to supply
disruptions
Supply in the future is expected to
come from the MENA region
Companies are increasingly Source: Energy Information Administration
turning to difficult and more costly
sources to unlock supply, such as
the Arctic
Source: Energy Information Administration, International Energy Agency
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29. National Oil Companies hold about
90% of the world’s oil reserves
•International Oil Companies,
including U.S. companies like
ExxonMobil, account for less
than half of global production
•National Oil Companies are
owned partly or in whole by a
national government, such as
Saudi Aramco (Saudi Arabia)
and Petrobras (Brazil)
•States use revenues from
NOCs for government programs
and/or objectives
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30. Energy Security: Spare Capacity,
Strategic Petroleum Reserves
Spare capacity can act as a cushion to insulate the world oil market from
supply shocks. EIA defines spare capacity as the volume of production that can
be brought on within 30 days and sustained for at least 90 days. Global spare
capacity is currently tight.
Saudi Arabia, the largest oil producer within OPEC, and the world's largest oil
exporter, historically has had the largest spare capacity (usually keeping more
than 1.5 - 2 million barrels per day of spare capacity on hand)
The U.S. President can tap into the Strategic Petroleum Reserve (capacity
of 727 million barrels) for a “severe energy supply interruption,” not
necessarily high gasoline prices
•The Department of Energy oversees the SPR, located at four Gulf Coast sites
•A presidentially-directed release has occurred three times: 1) 1991 during the
first Iraq War, 2) 2005 after Hurricane Katrina and 3) 2011 to offset global supply
disruption from political events in Libya and other countries.
Source: Energy Information Administration, U.S. Department of Energy
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