2010‐2011 Investment Plan for the Alternative and Renewable Fuel and Vehicle Technology Program

(California Energy Commission) The investment plan for the Alternative and Renewable Fuel and Vehicle Technology Program (program) serves as the guidance document for the allocation of program funding and is prepared annually based on input and advice of the Assembly Bill 118 Advisory Committee. This second investment plan, the 2010‐2011 Investment Plan for the Alternative and Renewable Fuel and Vehicle Technology Program, covers the third year of the program and reflects laws, executive orders, and policies to reduce petroleum use, greenhouse gas emissions, and criteria emissions, increase alternative fuel use, and spur the development of bioenergy sources in California. It details how the California Energy Commission, with input from stakeholders and the Advisory Committee, determined the program’s goal‐driven priorities coupled with project opportunities for funding. These priorities are consistent with the program’s goal “to develop and deploy innovative technologies that transform California’s fuel and vehicle types to help attain the state’s climate change policies.”

The foundation of the 2010‐2011 Investment Plan is the analytical method used in the first investment plan and addresses greenhouse gas reductions for 2020, and to 2050. It provides proposed funding recommendations, based on the alternative and renewable fuel and vehicle technology analyses and identified opportunities. Appendices A and B provide supporting analyses and important references for the development of this plan to help transform California’s transportation sector to a low‐carbon, cleaner, non‐petroleum, and more efficient energy future.

...Transportation fuels use is one of the top three energy use sectors in the United States, accounting for two‐thirds of the 20 million barrels of petroleum consumed daily. Of that, 65 percent is imported from foreign sources. In California, the transportation sector represents roughly half of all energy consumed and, like the United States, is 95 percent dependent on petroleum. In 2008, California’s transportation sector consumed about 15 billion gallons of gasoline and more than 3 billion gallons of diesel fuel. This sector represents approximately 40 percent of the state’s greenhouse gas emissions, the largest amount from any sector.

It has been nearly four decades since the 1973 Arab Oil Embargo and the ensuing economic disruption and geopolitical instability. The United States continues to be vulnerable to oil supply disruption and price shocks as a result of our dependence on petroleum, and sends almost a billion borrowed dollars a day out of the country for oil imports. This exacerbates the growing trade imbalance and severely dampens economic recovery. In addition to economic and geopolitical risks, we now see how domestic petroleum extraction presents increasing environmental risks as evidenced in the recent Gulf of Mexico oil spill disaster.

The unprecedented events of the past two years that have affected all Californians and the state’s economy have challenged the development of non‐petroleum transportation fuels and advanced vehicle technologies. The Great Recession of 2008‐2009, gasoline price increases in 2008, bankruptcies in the auto industry, financial institution collapses, job losses and severe capital constraints are among the many events. The de‐stabilizing impacts of these events have resulted in creating this challenging environment; while underscoring the importance of the development of alternative and renewable fuel and vehicle technologies for the many public benefits they can provide.

California is positioned to dramatically affect the direction of the nation’s transportation sector as it leads the way with landmark state regulations and incentives to decrease petroleum use and greenhouse gas emissions. The State Alternative Fuels Plan of 2007 (Assembly Bill 1007, Pavley, Chapter 371, Statutes of 2005), jointly developed and adopted by the Energy Commission and Air Resources Board, presented strategies to increase the use of alternative and non‐petroleum fuels for transportation. The State Alternative Fuels Plan set goals of reducing petroleum dependence by 15 percent and increasing alternative fuels use by 20 percent, by 2020. The alternative fuels proposed in the plan could achieve the usage goals, while reducing greenhouse gases by 15 percent to 20 percent in the near term. Other important California regulations include the Global Warming Solutions Act of 2006 (Assembly Bill 32), “Zero Emission Vehicle” regulations, the Low Carbon Fuel Standard, the Bioenergy Action Plan, the Renewable Portfolio Standard and the San Pedro Bay Ports Clean Air Action Plan.

‐2011 Investment Plan, the Energy Commission will continue to provide funding to accelerate the development and deployment of clean, efficient low‐carbon technologies that will achieve several key policy objectives: the reduction of greenhouse gas emissions, petroleum reduction, alternative and renewable fuel use and in‐state biofuels production. Achieving these objectives will require a portfolio of fuels and vehicle technologies including the development of electric drive and fuel cell vehicles, the production of low‐carbon biofuels, increased vehicle efficiency, and the continued deployment of natural gas and propane vehicles. READ MORE