Indicadores para confeccionar el Balance Social

Table 1: Assignment of fuel pathways to reporting categories. ... III-3 Table 2: Scenarios examined in this report. ... III-9

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Overview

A low carbon fuels standard (LCFS) would require any person producing, refining, blending, or importing transportation fuels in Minnesota to reduce these fuels’ average carbon intensity (AFCI), measured across the full fuel cycle: feedstock extraction, production, transport, storage, and use. An LCFS is expected to lower overall emissions from the transportation fleet.

Under a Department of Commerce contract, the University of Minnesota investigated and developed modeling and analytical frameworks with available data in order to compare the greenhouse gas, economic and environmental implications of various low carbon fuel standards (LCFS) policies for vehicles operated on Minnesota public roads. The present report provides findings of work performed for the policy modeling portion of the project.

Funding from the Commerce Department contract enabled the University to develop the transportation fuels components of the ECS model: vehicle demand growth, fuel economy standards, costs and prices, fuel production infrastructure, transportation life cycle emissions include drive train efficiency factors, federal RFS and national fuel prices. The policy model used best available data for assessing effects of a low carbon fuel standard on the fuel production pathways shown in Table 1. The table also shows how the pathways are aggregated in some of the results discussed in this report.

The project made use of a “policy linkages” model (now named “Energy Choice Simulator”, or ECS), which was developed in part under this contract. We use the desktop version of the model both to examine specific issues in LCFS design and to illustrate the range of issues that could potentially be addressed by ECS. (The desktop version of the model accompanies submission of this report and is available to the public from Department of Applied Economics, University of Minnesota upon request.) The LCFS modeled in this project applies to all transportation fuels currently used in Minnesota, including electricity and natural gas.

Data and exogenous policy assumptions, developed through a thorough review of the literature, consultations with state and federal agency personnel, and continued interaction with the Technical Assumptions Review Committee (TARC) associated with this project, are detailed in the References section and in Appendix B. A previous advisory committee, assembled by the University as part of pre-contract research on an LCFS, met once in 2008, but has not been convened subsequently.

Investigation revealed a wide range in data quality and availability. For example, Ethanol’s production costs and GHG emissions have been studied and published far more than have those of petroleum fuels, especially oil sands. Certain data elements were found to be so uncertain— whether because there is no existing technology or because the policies are under active research—that they were not usefully examined in this section of the study. Many of the data elements that are presently unknown or known only within extremely wide bounds will

eventually be estimated with more certainty, at which time they might be usefully enfolded into the ECS model. We do not include an indirect land use change element in our greenhouse gas accounting scheme. Also, data for production of “green diesel” from gasification of biomass and the so-called “hydrogen grid” was found to be so uncertain that they could not be usefully

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included in the policy model at this time. The fuel pathways included in analysis are provided in Table 1.

The policy model used here is newly developed. Like all new models, it will be improved over time through the efforts of current and subsequent researchers. As such, it should be thought of as a tool for “policy exploration” and not for “policy guidance.” We urge readers not to make policy decisions based upon the specific numbers developed by the model for this report. In general, we find that an LCFS, as modeled here, reduces overall greenhouse gas emissions relative to a no-LCFS baseline, especially after 2020. This finding holds whether or not the LCFS also governs electric vehicles on a drive-train-efficiency adjusted basis. A major reason for the post-2020 increase in emissions reduction is the modeled increase in LCFS stringency after that date. Of course, had we modeled a less-stringent standard, its effects would have been less. A greenhouse gas emissions tax could result in similar emissions reductions, although it would have different distributional consequences.

We estimate the effects of a Minnesota LCFS policy on Minnesota only. Whether or not such a state-level policy would be technically achievable at the modeled levels, or whether or not it would have net positive or negative effects on the nation as a whole are research topics beyond the scope of the present contract. Hence, although the modeling framework developed provides the means to compare implications of a wide range of LCFS options implemented in Minnesota, it is not possible for it to estimate the impact a MN LCFS would have on regional, national or global GHG emissions.

The model associated with this technical report in part relies upon LCFS emission estimates from the Greenhouse Gas Model section of this project. As noted there, a Minnesota low carbon fuel policy would work best if enacted with other states as a part of a broader coalition. Enactment of a Minnesota-only LCFS will provide an incentive for MN fuel producers to decrease emissions of their own fuels and will provide a disincentive for the use of fuels with increased carbon intensity such as fuels derived from oil sands. Leakage of higher carbon fuels into neighboring states is expected to occur when a policy is enacted unilaterally, although the GHG emission effects of increased transportation of fuels are minimal as calculated in the GHG Modeling Report.The data input assumptions used are detailed in Appendix A. It is important to note, however, that ECS allows a user to change input assumptions if they choose. In the online version of the model, this is

accomplished on the Assumptions Tab (see Appendix B). In the desktop version of the model, these assumptions are directly modifiable.

The Expenditures section aggregates transportation fuels as they are actually sold in Minnesota (for the most part): as blends of gasoline/ethanol and diesel/biodiesel plus natural gas and electricity. Each year’s expenditures are calculated separately in the model; each year’s prices are based on the cost of feedstocks, conversion, distribution, and taxes in place for that year.

III-3 Table 1: Assignment of fuel pathways to reporting categories.

Reported in Production and Emissions sections

Reported in Expenditures section

“Fuel Pathway” “Transportation Technologies” “Transportation Fuels”

Tar Sands Refinery Oil Sands Gasoline/Diesel

North American Refinery Refinery Gasoline/Diesel

Foreign Refinery Refinery Gasoline/Diesel

EOR Refinery Refinery Gasoline/Diesel

Coal CTL Coal to Liquids Gasoline/Diesel

Corn Ethanol Corn Grain Ethanol Ethanol

Grass Ethanol Cellulosic Ethanol Ethanol

Crop Residue Ethanol Cellulosic Ethanol Ethanol

Wood Ethanol Cellulosic Ethanol Ethanol

Soybean Biodiesel Biodiesel Biodiesel

Algae Biodiesel Biodiesel Biodiesel

Natural Gas Natural Gas Natural Gas

Feedstock Adv Biodiesel Advanced Biodiesel Biodiesel

SNG electricity electricity

IGCC and CCS electricity electricity

Existing Pulverized Coal electricity electricity

New Pulverized Coal electricity electricity

Gas Electric electricity electricity

Biomass electricity electricity

Photovoltaic electricity electricity

Wind Turbines electricity electricity

Old Nuclear electricity electricity

New Nuclear electricity electricity

Hydroelectric electricity electricity