Appendix F: Compliance Scenario Documentation

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1 Appendix F: Compliance Scenario Documentation Oregon Low Carbon Fuel Standards Report 11-AQ-004f 1/25/2011 0

Oregon LCFS Compliance Scenario Analysis Oregon Department of Environmental Quality UPDATED SCENARIO ANALYSIS RESULTS October 28, 2010 Jennifer

2 Oregon LCFS Compliance Scenario Analysis Oregon Department of Environmental Quality UPDATED SCENARIO ANALYSIS RESULTS October 28, 2010 Jennifer Pont, Jeff Rosenfeld TIAX LLC Stevens Creek Blvd, Suite 250 Cupertino, CA Tel Reference: 2009 TIAX LLC

3 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results Appendix 2

4 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results Appendix 3

5 Analysis Overview Tasks Objective: Estimate LCFS Impact on State Economy Approach: Evaluate a Range of Possible Compliance Scenarios and compare them to BAU TIAX Tasks Define Business As Usual Define Alternative Fuel Infrastructure Costs (BAU) Run VISION Model Create REMI Inputs Run REMI Model Define Compliance Scenarios JFA Tasks Economic Impact of Scenarios relative to BAU 4

6 Analysis Overview VISION VISION Model Inputs and Outputs Consumer fuel and vehicle expenditures used directly in Economic Modeling Vehicle populations and alternative fuel volumes used to estimate infrastructure costs used in Economic Modeling Historic and Future Total new vehicle sales each year Share of new vehicle sales by class, fuel/technology type Vehicle miles by class, model year Vehicle fuel economy by class, fuel/tech type and model year Carbon intensity for each fuel consumed Fuel prices Vehicle prices VISION Model Projection of: Vehicle population by class, fuel/tech type, model year Annual vehicle fuel consumption by type/vehicle class Average carbon intensity Consumer fuel expenditures Consumer vehicle expenditures 5

7 VISION Model Prep Vehicle Populations Scale VISION (U.S.) Vehicle Populations to Oregon VISION uses annual vehicle sales to estimate populations, and vehicle expenditures Vehicle Categories in VISION Class: Light-duty auto (LDA), Light-duty truck (LDT), Medium-duty vehicle (MDV) (class 3-6), Heavy-duty vehicle (HDV) (class 7-8) Fuel/Technology type: Flex-fuel vehicle (FFV), Hybrid-electric vehicle (HEV), Plug-in hybrid electric vehicle (PHEV), Electric vehicle (EV), CNG, diesel, gasoline Legacy Fleet: OR DOT database classifies vehicles as light duty or truck Light Duty - Not all records indicate LDA vs LDT - Using WA split for LDA/LDT - Fuel types are specified Medium Duty - DOT Truck and pass vehicles > 10,000 GVW - Deleted farming vehicles - Deleted heavy fixed construction Heavy Duty Vehicles from Motor Vehicle Carrier Division - Oregon registered vehicles - Pass-Through vehicles not included 6

8 VISION Model Prep Vehicle Populations Scale VISION (U.S.) Vehicle Populations to Oregon Future Annual Vehicle Sales (2010+) Use Energy Information Administration s Annual Energy Outlook (AEO) U.S. vehicle sales projections Scale with 10 yr avg ratio of Oregon new car sales to U.S. new car sales Vehicle Class Oregon Share of U.S. Sales Light Duty Auto 0.93% Light Duty Truck 1.03% Medium Duty Truck 1.6% Heavy Duty Truck 0.84% 7

9 HEV Share of New LDV Sales, % VISION Model Prep Adjusted Light Duty Plug-in Vehicle Sales Oregon HEV market share is 2X National sales rate Assume PHEV/EV sales are 2X National sales rate Add 1000 EVs in 2010 due to Oregon participation in The EV Project 1 Increased Ratio of EV:PHEV 2 from 1:99 to 1:6 till 2017, from adjusted EV sales to meet Zero-Emission Vehicle (ZEV) requirements, balance PHEVs 8% 6% 4% 2% 0% Washington State United States Oregon State Vehicle Populations Forecast Light Duty Auto Light Duty Truck Total Light Duty PHEV Market Share 1.83% 0.50% 1.27% PHEV Population 17,580 4,348 21,927 EV Market Share 2.35% 0.65% 1.64% EV Population 16,919 2,565 19,484 Total LDV Population 1,399,968 1,259,549 2,659,417 PHEV Fleet Share 1.3% 0.3% 0.8% EV Fleet Share 1.2% 0.2% 0.7% 1. The EV Project is an ARRA) project in which 4700 Nissan Leafs will be sold with free home chargers in five U.S. cities including Portland, Eugene, Salem, Corvalis. 2. Based on Analyst estimates ranging from 1:9 and 1:1 (provided by WA Dept of Ecology) 8

10 VISION Model Prep Vehicle Populations Added Medium and Heavy Duty CNG Vehicles VISION does not include medium and heavy duty CNG vehicles Using AEO2009 market share values for medium & heavy duty CNG vehicles Light Duty Medium Duty Heavy Duty 2022 Market Share 0.06% 6.1% 1.9% 2022 Population 1,320 2,

11 Population (thousands) VISION Model Prep Vehicle Populations Light Duty Vehicles 3,000 2,500 2,000 1,500 1, Populations LDA LDT Total Gasoline 962, ,338 1,779,547 Diesel 45,053 80, ,353 EtOH FFV 120, , ,428 Gasoline HEV 235, , ,772 Diesel HEV 1, ,687 Gasoline PHEV 17,580 4,348 21,927 Battery EV 16,919 2,565 19,484 CNG ,319 Total 1,399,968 1,259,549 2,659, EV CNG Diesel HEV Gasoline PHEV Diesel E85 FFV Gasoline HEV Gasoline 10

12 Population (thousands) VISION Model Prep Vehicle Populations Medium & Heavy Duty Vehicles These are vehicles registered in Oregon does not include pass through Does not include Diesel hybrid electric vehicles very small, negligible impact on fuel consumption, no impact on carbon intensity Does not include LNG very small and similar carbon intensity to CNG Heavy Duty CNG Hvy Duty Gasoline Hvy Duty Diesel Med Duty CNG Med Duty Gasoline Med Duty Diesel Populations MDV HDV Gasoline 9,541 2,669 Diesel 50,399 47,630 CNG 2, Total 62,031 51,

13 VISION Model Prep VMT and Fuel Consumption Verify VISION VMT and Fuel Consumption Results Once vehicle populations are defined, VISION calculates Vehicle Miles Traveled (VMT) - For each vehicle class and fuel type - Use VISION default VMT values function of model year and vehicle class Fuel consumption - For each vehicle class and fuel type - Function of population, VMT and fuel economy Calibrate Model Compare VISION VMT to Oregon historic VMT Compare VISION predicted fuel consumption to historic fuel consumption For Light Duty vehicles, predicted VMT is too low Increased VMT by a factor of 1.23 Resulting gasoline consumption for within 5% of actual Medium Duty vehicles no adjustment necessary Heavy Duty adjusted to account for fuel consumed by pass-through 12

14 Light Duty VMT, Billion miles/yr Oregon Gasoline Consumption, million gal/yr VISION Model Prep VMT and Fuel Consumption Verify VISION VMT and Fuel Consumption Results Adjusted light duty VISION VMT by factor of 1.23 Predicted gasoline consumption now ~ matches historic actual 45 2, Actual Oregon VMT 10 Adjusted VISION Prediction 5 VISION Prediction ,500 1, Actual Gasoline Consumption Vision Unadjusted Vision Adjusted

15 Medium Duty VMT, Billion miles/yr VISION Model Prep VMT and Fuel Consumption Verify VISION VMT and Fuel Consumption Results Did not adjust Medium duty VMT Medium duty VMT affects both gasoline and diesel consumption predictions Actual Oregon MD VMT MD VISION Unadjusted

16 Heavy Duty VMT, billion mi/yr Oregon Diesel Consumption, Million gal/yr VISION Model Prep VMT and Fuel Consumption Verify VISION VMT and Fuel Consumption Results Adjust HD VMT to account for Pass-Through trucks VISION predicted diesel consumption ~ historic actual Actual Oregon Heavy Duty VMT HD VISION Adjusted HD VISION Unadjusted Actual Oregon Use VISION Unadjusted VISION Adjusted

17 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results Appendix 16

18 BAU Assumptions & Results Baseline Carbon Intensity Baseline Carbon Intensity Values (WITH Indirect Land Use Change (ILUC)) Units Baseline Year (2010) Gasoline Baseline Carbon Intensity Blendstock Carbon Intensity g CO2e/MJ Neat Ethanol Carbon Intensity 1 gco2e/mj Ethanol Blend Level 2 % vol 10% Neat Ethanol Blend Level % energy 6.7% Gasoline Baseline Carbon Intensity gco2e/mj Target gco2e/mj 83.1 Diesel Baseline Carbon Intensity ULSD Carbon Intensity gco2e/mj Biodiesel Carbon Intensity 3 gco2e/mj BD Blend Level % energy 2.1% Diesel Baseline Carbon Intensity gco2e/mj Target gco2e/mj Assumes 26 Mgal/yr Boardman corn ethanol, 0.37 Mgal/yr waste berry ethanol, balance MW corn ethanol 2. Denatured ethanol - assumed to be 2% by vol gasoline blendstock 3. Assumes 10 Mgal/yr MW soybean BD, 3.5 Mgal/yr waste oil BD, and 0.3 Mgal/yr canola BD Corn ethanol assumes CARB ILUC value g/mj ILUC Soybean biodiesel assumes CARB ILUC value 62 g/mj 17

19 BAU Assumptions & Results Baseline Carbon Intensity Baseline Carbon Intensity Values (WITHOUT ILUC) Corn ethanol value has NO ILUC component Soybean biodiesel has NO ILUC component 18

20 BAU Assumptions & Results BAU Biofuel Volumes RFS2 Biofuels: Oregon s Proportionate Share Proportionate share of EPA Renewable Fuel Standard (RFS2) Primary Control Case Scaled with ratio of projected OR gasoline and diesel consumption relative to projected U.S. consumption Million Gallons/yr (2022) Oregon Proportionate Share of % GHG Minimum Volume EPA Analysis Primary RFS2 Volumes Reduction Requirement Control Case Ethanol Actual Ethanol Actual Equivalent Volumes Equivalent Volumes Total Renewable Fuel Total Advanced Biofuel Cellulosic Biofuel 60% Cellulosic Ethanol Cellulosic Diesel Biomass-based Diesel 50% Biodiesel (fame) Renewable Diesel 3 2 Other Advanced Biofuel 50% Brazilian Sugarcane Other Biodiesel Renewable Fuel 20% Total Ethanol Total Biodiesel

21 OR Share of RFS2 Volumes, MGY BAU Assumptions & Results BAU Biofuel Volumes RFS2 Biofuels: Oregon s Proportionate Share of Primary Control Case Cellulosic Ethanol Cellulosic Diesel Biomass Based Diesel Imported Ethanol Other Biodiesel Corn Ethanol 20

22 BAU Assumptions & Results BAU Biofuel Volumes BAU Ethanol Assumptions Quantity Ceiling: Proportionate shares (requires E85) Floor: Oregon rules (E10, no E85) Advisory Committee recommended considering Oregon gasoline station throughput relative to National Average to determine if E85 infrastructure costs would be more or less recoverable than the national average - Oregon average throughput = 523 gal/day per station (2007 Census) - U.S. average throughput = 489 gal/day per station 2007 Census) Conclude E85 infrastructure cost as recoverable in Oregon as the national average BAU assumes proportional shares of RFS2 Primary Control Case ethanol volumes Ethanol Types: Assuming proportionate shares of each ethanol type in RFS2 Primary Control Case (cellulosic, sugarcane, corn) Blend Level: Advisory Committee recommended using an E10 blendwall since greater blend levels are not currently allowable 21

23 BAU Assumptions & Results BAU Biofuel Volumes BAU Biodistillate Assumptions Biodistillate Volumes Ceiling: Proportionate shares (~ 15% blend by 2022) Floor: Oregon rules (2.7%, assumes 10% in PDX, 2% rest of state) Advisory Committee recommended using RFS2 Primary Control Case proportional shares for the BAU distillate category Bio-Distillate Types: Using Proportionate Shares of RFS2 Primary Control Case types (cellulosic, renewable, methyl-esters) 22

24 Blend Level or % FFV Miles on E85 BAU Assumptions & Results BAU Biofuel Volumes Business-As-Usual Biofuel Consumption Ethanol Project Oregon hits E10 Blendwall in 2013 Consuming proportional share of RFS2 ethanol volumes requires significant E85 BD blend level increases to ~13.5% in 2022 (state mandate ~2.7%) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% BAU Ethanol Blend % BAU FFV VMT on E85 (E10, Proportional Shares of RFS2) BAU Biodiesel Blend (RFS2 Proportional Shares) 0%

25 Ethanol Use, MGY BAU Assumptions & Results Oregon Biofuels Ethanol Consumption Total BAU Ethanol Use is ~ 250 MGY Sugarcane EtOH Cellulosic (wheat straw/trees) MW Corn Ethanol OR Waste Food & Poplar Boardman Corn EtOH

26 Biodiesel Use, MGY BAU Assumptions & Results Oregon Biofuels Biodistillate Consumption Primary Control case biodistillate volumes Except for cellulosic diesel delayed use until Cellulosic Waste Oil NW Canola MW Soybean

27 Carbon Intensity (g/mj) BAU Assumptions & Results Carbon Intensity BAU Carbon Intensity Gasoline Pool Diesel Pool One Pool 2.7% Reduction 4.0% Reduction % Reduction

28 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results Appendix 27

29 Gasoline Pool VISION Results Gasoline Pool Matrix Units Run 1 Run 2 Run 3 Run 4 Cellulosic (with ILUC) Mixed Ethanol (with ILUC) Mixed Ethanol (w/o ILUC) Max EV + Cellulosic (with ILUC) Ethanol Blend Level % vol 10% Up to 15% 10% 10% Ethanol Volumes MGY At least BAU At least BAU At least BAU At least BAU OR Corn MGY OR Waste Food MGY OR Farmed Trees MGY Avg MW Corn MGY Balance to achieve E10 Balance to achieve E10 Balance to achieve E10 Balance to achieve E10 Low CI MW Corn MGY 0 Up to RFS2 Share Up to RFS2 Share Only if needed for CI goal Brazil Sugarcane MGY 0 Up to RFS2 Share Up to RFS2 Share Only if needed for CI goal Cellulosic MGY Balance to achieve CI goal Vehicle Population Up to Share of RFS2 Max EtOH E85 FFV 1000 s BAU Increase if % E85 VMT is high Low to Moderate (up to 194) Increase if % E85 VMT is high Low to Moderate (up to 194) EVs & PHEVs 1000 s BAU BAU BAU Light Duty CNG 1000 s BAU BAU BAU BAU Med Duty CNG 1000 s 1.2*BAU 1.2*BAU 1.2*BAU 1.2*BAU E85 Use % VMT Float as needed to consume ethanol Float as needed to consume ethanol Float as needed to consume ethanol BAU Float as needed to consume ethanol 28

30 Gasoline Pool VISION Results Ethanol Feedstock Potential Assumed Oregon Ethanol Available Supplies Ethanol Type Supply (MGY) Notes MW Corn unlimited Low CI MW Corn 32 / 3,000 RFS2 Proportional Share / National Supply Boardman Corn 26 Pacific Ethanol (2/3 of capacity) Boardman Farmed Trees 0.25 Zeachem Plant Oregon Waste Food 1.5 Summit Natural Energy Oregon Wheat Straw 34 Max Potential including canola rotation Oregon Cellulosic 171 Forest residue, grass straw, etc 1 Brazil Sugarcane 24.6 / 2,240 RFS2 Proportional Share / National Supply Oregon Biomass Assessment: Potential for Fuel Production from Oregon Feedstocks, 4/15/2010, Oregon DEQ. 29

31 Gasoline Pool VISION Results Gasoline Pool Carbon Intensities Gasoline Pool Carbon Intensities (g/mj) Fuel Direct ILUC Wheat Straw Ethanol 21 0 Waste food, Forest Residue, Grass waste 21 0 Farmed Trees 16 5 Oregon Corn Ethanol Midwest Corn Ethanol Brazilian Sugarcane Ethanol Low-carbon Midwest Corn Ethanol Electricity (value shown has no EER applied) CNG 71 0 Electricity EER is 4.1 in 2010, decreasing to 3.1 in Results in carbon intensity ranging from 38 to 50 g/mj 30

32 Ethanol Blend Level & Share of FFV E85 Miles, % Fuel Consumption, Quads Gasoline Pool VISION Results Run 1 Fuel Use Run 1 (In-State Cellulosic with ILUC) Share of FFV Miles on E85 ~ 60% Assumes E10 is max amount of ethanol blended into gasoline % 70% % FFV Miles on E85 60% Ethanol Blend Level in Gasoline 50% 40% 30% 20% % Ethanol Electricity CNG Gasoline 0%

33 Ethanol Use, MGY Gasoline Pool VISION Results Run 1: Ethanol Sources Run 1 (In-State Cellulosic with ILUC) Ethanol Consumption ~ 307 MGY by Imported Cellulosic (wheat straw/trees) Oregon Wheat Straw OR Cellulosic (forest res, grass waste) Oregon Waste Food & Poplar Oregon Corn Ethanol MW Corn Ethanol

34 Fuel Consumption, Quads Ethanol Blend Level and Share of FFV Miles on E8, % Gasoline Pool VISION Results Run 1H Fuel Use Run 1H (Out-of-State Cellulosic with ILUC) Share of FFV Miles on E85 ~ 60% Assumes E10 is max amount of ethanol blended into gasoline % 70% % FFV Miles on E85 60% Ethanol Blend Level in Gasoline 50% 40% 30% 20% 10% % Ethanol Electricity CNG Gasoline

35 Ethanol Use, MGY Gasoline Pool VISION Results Scenario 1H: Ethanol Sources Run 1H (Out-of-State Cellulosic with ILUC) Ethanol Consumption ~ 308 MGY by Imported Cellulosic (wheat straw/trees) Oregon Waste Food & Poplar Oregon Corn Ethanol MW Corn Ethanol

36 Fuel Consumption, Quads Ethanol Blend Level and Share of FFV Miles on E8, % Gasoline Pool VISION Results Run 2 Fuel Use Run 2 (Mixed with ILUC) Cap E85 Share of FFV Miles at 70% If do not ~double population of FFVs, Must increase gasoline blend level to consume ethanol volumes % 70% 60% 50% 40% 30% 20% 10% % % FFV Miles on E85 Ethanol Blend Level in Gasoline Ethanol Electricity CNG Gasoline

37 Ethanol Use, MGY Gasoline Pool VISION Results Run 2: Ethanol Sources Run 2 (Mixed with ILUC) Ethanol Consumption ~ 400 MGY by Imported Cellulosic Oregon Wheat Straw Brazil Sugarcane OR Cellulosic (forest res, grass waste) Low Carbon MW Corn Oregon Waste Food & Poplar Oregon Corn Ethanol MW Corn Ethanol

38 Fuel Consumption, Quads Ethanol Blend Level & Share of FFV E85 Miles, % Gasoline Pool VISION Results Run 3 Fuel Use Run 3 (Mixed without ILUC) Share of FFV Miles on E85 ~ 40% Adjusted blend level to match Run % 70% 60% 50% 40% 30% 20% % 0% % FFV Miles on E85 Ethanol Blend Level in Gasoline Ethanol Electricity CNG Gasoline

39 Ethanol Use, MGY Gasoline Pool VISION Results Run 3: Ethanol Sources Run 3 (Mixed without ILUC) Ethanol Consumption ~ 330 MGY With lower CI (no ILUC), need 75 MGY less ethanol than Scenario Oregon Wheat Straw Sugarcane Oregon Cellulosic (Forest res, grass waste) Low Carbon MW Corn Oregon Waste Food & Poplar Oregon Corn Ethanol MW Corn Ethanol

40 Fuel Consumption, Quads Ethanol Blend Level & Share of FFV E85 Miles, % Gasoline Pool VISION Results Run 4 Fuel Use Run 4 (Max EVs + Cellulosic Ethanol with ILUC) Share of FFV Miles on E85 ~ 50% Assumes E10 is max amount of ethanol blended into gasoline % % % FFV Miles on E85 60% % % % % 10% Ethanol Blend Level in Gasoline % Ethanol Electricity CNG Gasoline

41 Ethanol Use, MGY Gasoline Pool VISION Results Run 4: Ethanol Sources Run 4 (Max EVs + Cellulosic EtOH with ILUC) Ethanol Consumption ~ 280 MGY in 2022 With high EV penetration, reduce Ethanol by ~ 30 MGY compared to Run Imported Cellulosic Oregon Wheat Straw Oregon Cellulosic (Forest res, grass waste) Oregon Waste Food & Poplar Oregon Corn Ethanol MW Corn Ethanol

42 Population (thousands) Gasoline Pool VISION Results Run 4 EV/PHEV Populations Run 4 (Max EVs + Cellulosic Ethanol with ILUC) 6x BAU market share to get to 240,000 plug-in vehicles by 2022 Maintain EV:PHEV market share ratio at 1:6 for all years (meets ZEV) 3,000 2,500 EV CNG Diesel HEV 2,000 1,500 1,000 LDA LDT Total PHEV 172,012 34, ,144 EV 29,532 5,631 35,163 Gasoline PHEV Diesel E85 FFV Gasoline HEV Gasoline 500 Total PHEV/EV 201,544 39, ,307 Total Light Duty 1,399,968 1,259,549 2,659,

43 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results Appendix 42

44 Proposed Compliance Scenarios Diesel Pool Units Run 6 Run 7 Run 8 Run 9 Cellulosic (with ILUC) Max Conventional (with IILUC) Max Conventional (w/o ILUC) Max Natural Gas (with ILUC) Biodiesel Blend Level % At least BAU At least BAU At least BAU At least BAU OR Waste Oil MGY Max Capacity Max Capacity Max Capacity Max Capacity OR Cellulosic MGY Medium: up to 112 NW Canola MGY As needed to achieve reduction Low: up to 79 Low: up to 79 Low: up to 79 High: up to max available NW Renewable Diesel MGY 50 MGY Maximum High: up to max available As needed to achieve reduction MW Soybeans MGY Balance Balance Balance Balance CNG Consumption Biogas Derived MMBtu Low to Moderate: up to ½ of unused Low to Moderate: up to ½ of unused Low to Moderate: up to ½ of unused High: All of unused Pipeline NG MMBtu Balance Balance Balance Balance Vehicle Populations Medium Duty CNG 1.2 * BAU 1.2 * BAU 1.2 * BAU 4 * BAU Heavy Duty CNG 1.2 * BAU 1.2 * BAU 1.2 * BAU 4 * BAU 43

45 Gasoline Pool VISION Results Diesel Pool Biofuel Supplies Assumed Oregon Biofuel Available Supplies Biodistillate Type Supply (MGY) Waste Oil 3.5 / 20 Notes Current Capacity / DEQ projected potential NW Canola 29.3 Max available w/o ILUC a MW Soybean Unlimited Out of State SB Renewable Diesel (camelina) 50 Camelina grown in other NW states Cellulosic 79 / 112 CNG (LFG) 2.15 / 4.3 Million MMBtu RFS2 Primary Control Case Fair Share /RFS2 Low Ethanol Case Fair Share 50% / 100% of Unused Biogas b a - 842,924 Acres outside of Willamette Valley available, 40% of time can grow Canola (2 out of 5 years, yield ~ 90 gal BD/acre b - Includes Wastewater Treatment, Organic Digesters and Landfill Gas 44

46 Gasoline Pool VISION Results Diesel Pool Carbon Intensities Diesel Pool Carbon Intensities (g/mj) Fuel Direct ILUC MW Soybean Biodiesel Waste Oil Biodiesel 10 0 NW Canola Biodiesel 27 0* Renewable Diesel from Camelina 29 0* Cellulosic Diesel CNG (pipeline NG) 71 0 CNG (biogas) 11 0 Assume Canola from Oregon no ILUC b/c will replace fallow in wheat crop rotation Assume Camelina is grown outside of Oregon, replacing fallow in wheat crop rotation 0 ILUC. 45

47 Biodiesel Blend Level, % Fuel Consumption, Quads Diesel Pool VISION Results Run 6 Fuel Use Run 6 (In-State Cellulosic Diesel with ILUC) ~ 15% BD blend by 2022 (higher than BAU) Med & Heavy CNG Off-Road Diesel Medium & Heavy Biodiesel Medium & Heavy Diesel Off-Road Biodiesel Light Duty Biodiesel Light Duty Diesel % 15% % % 0%

48 Biodiesel Use, MGY Diesel Pool VISION Results Run 6: BioFuel Use Run 6 (In-State Cellulosic Diesel with ILUC) Biodistillate Consumption ~ 116 MGY in 2022 Biogas derived CNG ~ 17 MGY (diesel gal equiv) CNG From Biogas (diesel equiv) Cellulosic Waste Oil NW Canola MW Soybean

49 Biodiesel Blend Level, % Fuel Consumption, Quads Diesel Pool VISION Results Run 6H Fuel Use Run 6 (In-State Cellulosic Diesel with ILUC) ~ 15% BD blend by 2022 (higher than BAU) Med & Heavy CNG Off-Road Diesel Medium & Heavy Biodiesel Medium & Heavy Diesel Off-Road Biodiesel Light Duty Biodiesel Light Duty Diesel % % 10% % 0%

50 Biodiesel Use, MGY Diesel Pool VISION Results Run 6H: BioFuel Use Run 6H (In-State Cellulosic Diesel with ILUC) Biodistillate Consumption ~ 116 MGY in 2022 Biogas derived CNG ~ 17 MGY (diesel gal equiv) CNG From Biogas (diesel equiv) Cellulosic Waste Oil NW Canola MW Soybean

51 Biodiesel Blend Level, % Fuel Consumption, Quads Diesel Pool VISION Results Run 7 Fuel Use Run 7 (Conventional BD with ILUC) ~ 14% BD blend by Med & Heavy CNG Off-Road Diesel Medium & Heavy Biodiesel Medium & Heavy Diesel Off-Road Biodiesel Light Duty Biodiesel Light Duty Diesel % 15% 10% % 0%

52 Biodiesel Use, MGY Diesel Pool VISION Results Run 7: BioFuel Use Run 7 (Conventional BD with ILUC) Biodistillate Consumption ~ 108 MGY in 2022 CNG derived from biogas ~ 17 MGY (diesel equiv) Cellulosic CNG From Biogas (diesel equiv) Camelina RD NW Canola Waste Oil MW Soybean

53 Biodiesel Blend Level, % Fuel Consumption, Quads Diesel Pool VISION Results Run 8 Fuel Use Run 8 (Conventional BD without ILUC) ~ 13.5% BD blend by Med & Heavy CNG Off-Road Diesel Medium & Heavy Biodiesel Medium & Heavy Diesel Off-Road Biodiesel Light Duty Biodiesel Light Duty Diesel % 15% 10% 5% %

54 Biodiesel Use, MGY Diesel Pool VISION Results Run 8: BioFuel Use Run 8 (Conventional BD without ILUC) Biodiesel Consumption ~ 106 MGY in 2022 With lower CI, can use mainly soybean BD to satisfy volume and CI requirements Very little Bio-CNG needed in CNG From Biogas (diesel equiv) NW Canola Waste Oil MW Soybean

55 Biodiesel Blend Level, % Fuel Consumption, Quads Diesel Pool VISION Results Run 9 Fuel Use Run 9 (Max Natural Gas, Conventional BD) ~ 13.7% BD blend by Med & Heavy CNG Off-Road Diesel Medium & Heavy Biodiesel Medium & Heavy Diesel Off-Road Biodiesel Light Duty Biodiesel Light Duty Diesel 20% 15% % 5% %

56 Biodiesel Use, MGY Diesel Pool VISION Results Run 9: BioFuel Use Run 9 (Max Natural Gas, Conventional BD) 103 MGY biodistillate Assumes use of all unused biogas potential (33 MGY diesel equiv) Cellulosic CNG From Biogas (diesel equiv) NW Canola Waste Oil MW Soybean

57 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results Appendix 56

58 One Pool VISION Results Premise One-Pool Scenario Constraints Set PHEV/EV population at 2 BAU (ensuring ZEV compliance) No increase in LDD Cap Biodistillate volume at fair share Cap Ethanol volume at fair share 57

59 Ethanol Blend Level and Share of FFV Miles on E8, % Fuel Consumption, Quads One Pool VISION Results Gasoline Pool Fuels One-Pool Scenario Gasoline and Replacements Share of FFV Miles on E85 ~ 60% Assumes E10 is max amount of ethanol blended into gasoline % 70% % FFV Miles on E85 60% Ethanol Blend Level in Gasoline 50% 40% 30% 20% Ethanol Electricity CNG Gasoline 10% 0%

60 Ethanol Use, MGY One Pool VISION Results Ethanol Types One-Pool Scenario Ethanol Consumption ~ 300 MGY in Imported Cellulosic (wheat straw/trees) Oregon Wheat Straw OR Cellulosic (forest res, grass waste) Oregon Waste Food & Poplar Oregon Corn Ethanol MW Corn Ethanol

61 Biodiesel Blend Level, % Fuel Consumption, Quads One Pool VISION Results Fuel Use One-Pool Scenario: Diesel and replacements ~ 14.3% BD blend by Med & Heavy CNG Off-Road Diesel Medium & Heavy Biodiesel Medium & Heavy Diesel Off-Road Biodiesel Light Duty Biodiesel Light Duty Diesel % % % % %

62 Biodiesel Use, MGY Diesel Pool VISION Results BioFuel Use One-Pool Scenario Diesel replacements Biodistillate Consumption ~ 113 MGY in 2022 Bio-CNG Consumption ~ 16 MGY in 2022 (diesel equiv gal) Cellulosic Camelina RD CNG From Biogas (diesel equiv) Waste Oil NW Canola MW Soybean

63 Carbon Intensity (g/mj) Diesel Pool VISION Results Carbon Intensity One-Pool Scenario Slightly More Diesel pool reductions than gasoline Gasoline Pool Diesel Pool One Pool % 10.0% 10.4%

64 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results 6 Consolidated Scenario Results Appendix 63

65 Consolidated Scenarios Scenario Matrix VISION Runs Combined to Form Scenarios: Scenario Gasoline Pool Run Diesel Pool Run A: Cellulosic Biofuels (In-State) Run 1 Run 6 AH: Cellulosic Out of State Run 1H Run 6H B: Mixed Biofuels with ILUC Run 2 Run 7 C: Mixed Biofuels No ILUC Run 3 Run 8 D: Technology and cellulosic biofuels Run 4 Run 9 E: One Pool CH: Mixed, no ILUC, High Oil Run 3H Run 8H CL: Mixed, no ILUC, Low Oil Run 3L Run 8L 64

66 Change in Fuel Use Relative to BAU, Trillion Btus Change in Fuel Use Relative to BAU, Trillion Btus Change in Fuel Use Relative to BAU, Trillion Btus Change in Fuel Use Relative to BAU, Trillion Btus Consolidated Scenarios Change in Fuel Use Relative to BAU Scenario A Gasoline 10 Ethanol 10 5 Electricity 5 Diesel 0 Biodiesel 0-5 CNG -5 Scenario H (Scen A Out-of-State) Fuel Use Gasoline Ethanol Electricity Diesel Biodiesel CNG Scenario D 15 Gasoline Ethanol 10 One Pool Gasoline Ethanol 5 0 Electricity 5 Diesel 0 Biodiesel Electricity Diesel Biodiesel -5 CNG -5 CNG

67 Change in Fuel Use Relative to BAU, Trillion Btus Change in Fuel Use Relative to BAU, Trillion Btus Change in Fuel Use Relative to BAU, Trillion Btus Change in Fuel Use Relative to BAU, Trillion Btus Consolidated Scenarios Fuel Use Change in Fuel Use Relative to BAU (concluded) Scenario B 15 Gasoline Ethanol 10 Scenario C Gasoline Ethanol 5 0 Electricity 5 Diesel Biodiesel 0 Electricity Diesel Biodiesel -5 CNG -5 CNG Scenario C (High Oil) 15 Gasoline Ethanol 10 Scenario C (Low Oil) Gasoline Ethanol 5 0 Electricity 5 Diesel Biodiesel 0 Electricity Diesel Biodiesel -5 CNG -5 CNG

68 Agenda 1 Analysis Overview & VISION Model Prep 2 Business-As-Usual Assumptions & Results 3 Gasoline Pool VISION Results 4 Diesel Pool VISION Results 5 One-Pool VISION Results Appendix 67

69 Market Share, % Market Share, % Appendix: VISION Inputs Vehicle Market Shares Market Shares of Alternative Fuel Vehicles Used VISION defaults for all vehicle types except PHEVS and EVs Doubled EV/PHEV market share Washington HEV shares are double national rate Increased ratio of EV:PHEV from default of 1:99 to 1:6 120% 100% Light Duty Auto 120% 100% Light Duty Trucks Gasoline PHEV Diesel HEV 80% 60% 80% 60% Gasoline HEV CNG Diesel 40% 40% Ethanol FFV 20% 0% 20% 0% BEV Gasoline

70 Define Business-As-Usual Fuel Economy Vehicle Fuel Economy VISION model has baseline vehicle fuel economy values over time Light duty baseline vehicle is mid-size gasoline - Includes CAFE improvements - Similar to Pavley tailpipe GHG standard Medium & Heavy duty baseline vehicles are diesel Fuel economy for alternative vehicles are scaled from baseline vehicle with Energy Economy Ratio (EER) Ratio of baseline vehicle MJ/mi to alt vehicle MJ/mi Also used to scale carbon intensity values Modifying selected VISION EERs EVs PHEVs (electric portion) Light duty diesel Light duty CNG HD CNG (added) 69

71 Appendix: VISION Inputs Fuel Economy PHEV and EV EERs TIAX adjusted the VISION default EER for EVs and the electric portion of PHEVs Increased 2010 EV fuel economy to CARB value Assume no EV fuel economy improvement through 2022 Light Duty Vehicles Units VISION Default CARB Gasoline Vehicle PHEV/EV Assumption for Washington 2010 mi/gal mi/gal mi/gal 38.9 X MJ/mi mi/gal a 122 b 2020/2022 mi/gal a 122 b PHEV/EV EER a. Converted to mi/gal using GREET default LHV for CARFG of 113,927 Btu/gal b. Converted to mi/gal using GREET default LHV for conventional gasoline of 116,090 Btu/gal 70

72 Appendix: VISION Inputs Fuel Economy Other EER Adjustments Light Duty Diesel The VISION default EER for light duty diesel vehicles is constant over time at 1.3, resulting in a fuel economy of over 50 mpg in TIAX adjusted the EER to reflect improvements to the gasoline vehicle through 2018 that will not translate to diesel vehicles - Use the default value of 1.3 in Decrease to 1.1 by 2018 The light duty diesel EER is applied to the diesel carbon intensity value in Scenario F only (One-Pool Scenario) Light Duty CNG The default EER was TIAX revised to 1.0 reflect the Honda civic GLX Consistent with CARB LCFS analysis Medium/Heavy duty CNG EER This category was not included in VISION TIAX utilized an EER of 0.90 based on the Cummins Westport ISLG engine Consistent with CARB LCFS analysis 71

73 Fuel Economy, mi/gge Appendix: VISION Inputs Fuel Economy Light Duty Fuel Economy Summary Light Duty Autos Gasoline Updated EV E85 FFV Updated Diesel CNG Updated Gasoline HEV PHEV Updated 72

74 Fuel Economy, mi/gge Appendix: VISION Inputs Fuel Economy Medium and Heavy Duty Fuel Economy Summary VISION has slight increases in heavy duty vehicle fuel economy Medium Duty Gasoline Medium Duty Diesel Medium Duty CNG Heavy Duty Gasoline Heavy Duty Diesel Heavy Duty CNG

75 $1000/new vehicle $1000/new vehicle Appendix: VISION Inputs $20 LDA Incremental Cost $15 $10 $5 $ $20 LDT Incremental Cost $15 $10 $5 EV EV E-85 FFV Diesel CNG Gasoline HEV Diesel HEV Gasoline PHEV E-85 FFV Diesel CNG Gasoline HEV Diesel HEV Gasoline PHEV Vehicle Prices VISION default price increments utilized EV increment consistent with current Leaf pricing Battery cost projections may lead to lower EV price differentials by 2020 This seems to be a conservative economic assumption $

76 E85 Price, $/gal Motor Gasoline Price, $/gal Appendix: VISION Inputs Fuel Prices Gasoline and Ethanol Used AEO2010 Pacific Prices AEO2010 in 2008$ AEO2009 in 2007$ AEO U.S. AEO Pacific AEO U.S. AEO Pacific AEO2010 in 2008$ AEO2009 in 2007$ AEO U.S. AEO Pacific AEO U.S. AEO Pacific

77 Diesel Prices, $/gal Appendix: VISION Inputs Fuel Prices Diesel and Biodiesel Prices For Diesel, using AEO2010 Pacific forecast For Biodiesel, using diesel price + $0.63 EIA does not forecast BD prices U.S. DOE EERE data indicate a 5 year average price differential of $ AEO 2010 in 2008$ AEO2009 in 2007$ AEO U.S. AEO Pacific AEO U.S. AEO Pacific VISION2009 Biodiesel Assumed Biodiesel Price

78 Electricity Price, cents/kwh Define Business-As-Usual Fuel Prices Electricity Prices Compared Oregon retail electricity prices to U.S. average prices. Seven year average of ratio of OR to U.S. prices is 78% Applied 78% factor to AEO2010 U.S. price Oregon Estimate is 78% of AEO2010 U.S. forecast. AEO U.S. AEO Pacific AEO U.S. AEO Pacific Oregon Estimate

79 NG Price, $/MMBtu Appendix: VISION Inputs Fuel Prices CNG Prices Using AEO2010 Pacific Forecast in 2008$ 2009 in 2007$ AEO U.S. AEO Pacific AEO U.S. AEO Pacific

80 Define Business-As-Usual Off-Road Diesel Include Affected Off-Road Diesel Consumption Off-Highway Construction, Mining Assume 90% of this category Railroad Intrastate estimated at 6,385 thousand gal/yr* Corresponds to 8% of category Vessel Bunkering All commercial and private boats Assume 50% of this category Assumptions result in Million gal/yr on-road 41.9 Million gal/yr non-road Non-road/(on-road+non-road) = 7.2% Add off-road diesel consumption to VISION with multiplier of Oregon Distillate Use, 1000 gal/yr ( avg) Off-Highway, 31,480 On-Highway, 538,700 Railroad, 76,530 Vessel Bunker, 14,318 Residential Commercial Industrial Oil Companies Farming Electric Utility Railroad Vessel Bunker On-Highway Military Off-Highway Source: EIA Oregon Distillate Use Data *From Oregon DEQ RR Activity Data Average of 2002, 2005, 2008 useage. 79

Designing a Low-Carbon Fuel Standard for the Northeast

Designing a Low-Carbon Fuel Standard for the Northeast Matt Solomon msolomon@nescaum.org Northeast LCFS Workshop Yale University October 14, 2008 What s carbon intensity again? A measure of the total CO