Transportation Issues in a Changing Energy Economy Wisconsin s Energy Future: Third Annual Nelson Institute Earth Day Conference April 22, 2009 Madison, Wisconsin Francis X. Vogel Executive Director Wisconsin Clean Cities
What Will Be Our Children s Energy Future?
Alternative Fuels, Alternative Fuel Vehicle (AFV)s and the Triple Bottom Line Promote environmental, energy and economic security We re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that s got to change The answer is to end our reliance on carbon-based fuels. - Al Gore, Former Vice President 7/18/08
Wisconsin Annual Fuel Use Gasoline: 2,400,000,000 gallons Diesel (On-Road: 782,000,000 E85: 5,000,000 Propane (LPG): 2,300,000 Biodiesel: 809,000 Natural Gas (CNG): 206,000
Wisconsin Vehicles At-A-Glance Gasoline: 5,535,918 Diesel: 292,348 E85 Flex-Fuel: 141,236 Hybrid-Electric: 10,208 Propane (LPG): 269 Natural Gas (CNG): 152 Electric 13
Wisconsin Fueling Stations Gasoline/E10: 3,500 Diesel: 2,529 E85: 115 Propane: 45 Biodiesel: 24 Natural Gas (CNG): 19
E85 and Flex-Fuel Vehicles Wisconsin ranks 9 th in ethanol production nationwide, with a 473 MGY (million gallons per year) capacity Benefits: lower emissions, high-performance, helps local economy through its use of home-grown feedstock Challenges: lower energy content (fuel economy), availability, consumer awareness, pricing relative to gasoline
Hybrid-Electric Vehicles Growing availability: 15 models from five manufacturers, with many more in development Technology: regenerative braking, electric motor drive/assist, automatic start/shutoff Benefits: improved fuel economy, lower emissions Challenges: incremental cost of battery and new technology
Propane (LPG) Benefits: lower amounts of some harmful emissions and carbon dioxide, domestically-produced Challenges: limited availability of fuel and vehicles
Biodiesel Benefits: domestically-produced, clean-burning, renewable substitute for petroleum diesel; can serve as low-blend (B2) lubricant additive for ULSD Challenges: limited availability of higher blends (B20 and up), B20- capable vehicles and infrastructure; higher price relative to diesel, perceived quality issues Bright Spot: Innovation Fuels Tanco Milwaukee, located at the Port of Milwaukee, with a 13.1 million gallon capacity, is the first terminal in the nation dedicated to selling and distributing renewable fuel
Natural Gas (CNG) Benefits: lower emissions and cost; domestically-produced Challenges: limited availability of fuel, vehicles and range
One of Beijing s Environmental Bus Fleet
Electric Vehicles Propelled by an one or more electric motors, powered by rechargeable battery packs Benefits: energy-efficient; environmentally-friendly, especially if using electricity from renewable sources; greater availability and options. Challenges: NEVs (Neighborhood Electric Vehicles) still limited as to range & as to where they re street-legal; battery cost and weight; driving range.
Energy Independence and Security Act (EISA) of 2007 * An omnibus energy policy law * Builds on the Energy Policy Act of 2005 * Perhaps the most far-reaching single piece of energy-related legislation since the 1970s.
Title I: Energy Security Through Improved Vehicle Fuel Economy Sets a target of 35 MPG for cars and light trucks by 2020, the first change in CAFE (Corporate Average Fuel Economy) since 1972. Establishes a fuel economy program for medium- and heavy-duty vehicles. Sets separate fuel economy program for light trucks.
Title II: Energy Security Through Increased Production of Biofuels Increases and extends the previous RFS (Renewable Fuels Standard) from 5.4 BGY (billion gallons per year) to 9 BGY in 2008 and 36 BGY in 2022. Starting in 2016, all of the fuel increase in the RFS target must be met by advanced biofuels (e.g., cellulosic ethanol), defined as fuels not derived from corn starch.
Wisconsin s Strategic Goals * 25 by 25: Generate 25% of the state s electricity and transportation fuel needs from renewable sources by 2025. * 10 percent of renewables market * Research leadership on the national level
Energy Independent Communities Wisconsin Energy Independent Communities program launched 3/31/08 Voluntary agreement between 70-plus communities and the State of Wisconsin to adopt the 25x25 strategic goals First quarterly meeting held at the Wisconsin Renewable Energy Summit on March 26, with the second one set for June 29
Alternative Motor Vehicle Credit Passenger Autos & Light Trucks Use IRS Form 8910 to claim credit for IRS-certified vehicles, after meeting the following vehicle requirements: * placed in service after 12/31/05 and purchased on or before 12/31/10 * original use of the vehicle must begin with taxpayer claiming credit * must be acquired for use or lease by taxpayer claiming credit - If leased to a consumer, the leasing company may claim the credit - Seller to a tax-exempt entity may claim the credit, if the amount of the credit is clearly disclosed to the purchaser.
Credit Phase-Out The credit begins to decrease 6 9 months after at least 60,000 of the manufacturer s qualifying vehicles have been sold. Practical Effect of Phase-Out General Motors, Ford, Mazda & Nissan: happy days Honda: Going, going, gone since 12/31/08 Toyota & Lexus: gone since 10/1/07
Honda Civic GX: Still the Only Certified Alternative Fuel Vehicle Available in Wisconsin The GX, which operates solely on compressed natural gas (CNG), is eligible for a credit of $4,000. The credit represents a percentage of the incremental cost of the alternative fuel technology. Other qualifying technologies include liquefied natural gas (LNG), liquefied propane gas, hydrogen and M85 (at least 85% methanol).
Hybrid Heavy Trucks Credit Qualifying vehicles 8,500 14,000 pounds: up to $3,000 14,000 26,000 pounds: up to $6,000 Over 26,000 pounds: up to $12,000 The Energy Policy Act of 2005 provides that taxpayers buying a new, qualifying vehicle between 1/1/06 12/31/09 may claim a credit. The amount depends on the weight class of the vehicle, its fuel economy relative to a conventional vehicle and the incremental cost.
Alternative Fuel Infrastructure Tax Credit A tax credit equal to 30% of the cost of the alternative refueling property, up to $30,000 Qualifying fuels: compressed natural gas (CNG), propane, E85, biodiesel blends of B20 or higher, hydrogen Residential refueling equipment buyers may receive a tax credit of $1000 (e.g. Phill by FuelMaker, a natural gas home refueling appliance) Tax-exempt organizations may pass the credit back to the equipment seller
Alternative Motor Vehicle & Hybrid Tax Credit Information Sources Internal Revenue Service (IRS) U.S. Department of the Treasury www.irs.gov/newsroom American Council for an Energy-Efficient Economy (ACEEE) www.aceee.org
Incentives and Grants Tax Refund: taxi operator Wisconsin fuel tax reimbursed if using an alternative fuel Fleet Training on Eco-Driving Project Congestion Mitigation and Air Quality Improvement (CMAQ) Program Grants Emissions Reduction Funding Opportunities Clean Cities Program Funding Non-financial incentives and additional resources
American Recovery & Reinvestment Act Signed into law 2/17/09 by President Barack Obama, ARRA is the largest economic stimulus package since World War II Transportation energy components total $1 billion, with separate energy package to follow
Fleet Training on Eco-Driving Project Unique effort nationwide Partnership between Wisconsin Department of Natural Resources, Wisconsin Clean Cities and Milwaukee Area Technical College The City of Milwaukee Department of Public recently received classroom instruction and behind-the-wheel training as the first of two selected fleets, which need be located in southeastern Wisconsin. Veolia Water Milwaukee begins its training May 1.
Congestion Mitigation and Air Quality (CMAQ) Improvement Program Flexible source of funding to state and local governments for transportation projects and programs to meet Clean Air Act requirements Focuses solely on nonattainment and maintenance areas, primarily located in southeastern Wisconsin. The 11 eligible counties include Door, Kenosha, Kewaunee, Manitowoc, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha.
CMAQ Program Private entities interested in applying for funds must find a public sponsor with taxing authority to serve as the lead organization Eligible projects fall into three broad categories: reduce vehicle miles traveled (VMT), congestion-related emissions or the per-mile rate of vehicle emissions through improved vehicle and fuel technologies (e.g., alternative/clean fuel vehicles and fueling facilities, diesel engine idling reduction and retrofit projects) The current cycle covers FY 2008 FY 2010. Proposals for the next cycle, FY 2010 FY 2012, were due 4/20/09. Most of the anticipated $23.2 million will be available for use in FY11 and FY12 (10/1/10 9/30/11). Contact John Duffe, Wisconsin Department of Transportation, for more information, at (608) 264-8723 or at john.duffe@dot.state.wi.us
Midwest Clean Diesel Initiative Diesel Emissions Reduction Program Proposals due 4/28/09 for the latest solicitation, with ARRA funding of $156 million at stake nationwide Wisconsin Clean Diesel Coalition will coordinate efforts statewide on an ongoing basis, with the Wisconsin Department of Natural Resources as facilitator
Clean Cities Program Solicitation Original announcement released 12/22/08 anticipated funding $6.4 million over two-year period, with $3.2 million each in FY 09 and FY 10. Proposals were due 3/31/09. Original Areas of Interest: 01: Refueling Infrastructure for Alternative Fuels 02: Incremental Cost of Dedicated AFVs 03: Education & Outreach Workshops for Petroleum Reduction Fuels & Technologies ARRA-funded new interest area adds $300 million, with proposals due 5/29/09 04: Alternative Fuel & AFVs Pilot Program Wisconsin Clean Cities & Wisconsin Office of Energy Independence are spearheading a joint proposal covering $15 million in projects
Possible Non-Fiscal Incentives Free parking in designated areas for high-efficiency hybrids and specified AFVS AFVs and hybrid vehicles may use high-occupancy vehicle (HOV) lanes Preferential parking at workplaces Preferred curbside parking for delivery vehicles (e.g., green stripe parking)
U.S. Department of Energy Fleet Portal (formerly the Clean Fleet Guide) An objective entry point for fleets that aim to buy green vehicles and save money by lowering fuel consumption The Swiss Army knife of available tools An unbiased one-stop-shop for fleets sponsored by Clean Cities
Fleet Portal Fleet Managers Toolkit Fleet Applications Fleet Experiences Financial Incentives Technical Assistance Visit http://www.eere.energy.gov/afdc/fleets/index.html for more information
For more information, please contact: Francis X. Vogel Executive Director Wisconsin Clean Cities-Southeast Area, Inc. 231 W. Michigan St., P318 Milwaukee, WI 53203 414.221.4958 - phone 414.221.2851 fax francis.vogel@we-energies.com www.wicleancities.org Thank you for your time and participation today at Transportation Issues in a Changing Energy Economy!