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THE 2007 ENERGY BILL: DC Mandates MPG and RFS

2007 energy bill, RFS, fuel efficiency, automakersOf more than 10,000 bills that have been logged on the docket of the current Congress, the 2007 Energy Bill is one that will certainly impact the day to day lives of every American into the future. Individual agendas and political biases aside, there is widespread agreement that the bill will be effective in reducing our dependence on foreign oil. The “how” is most significant. It will do so by investing in clean, renewable and alternative energy technologies and resources, and improving energy efficiency.

Here are a few of the bill’s key provisions that affect major American industries and individual consumers alike.

On the road
We’ll see the trend toward more fuel efficient vehicles build momentum as we address America’s addiction to oil. By 2020, new cars and light trucks must achieve a 40% increase in fuel efficiency, for a fleet-wide average of 35mpg.

Automakers are currently required to meet a fleet-wide average of 27.5 mpg for cars and 22.2 mpg for sport utility vehicles and small trucks. The car standard has not changed since 1989, though the truck requirements have been increased slightly by the Bush administration.
The bill offers tax incentives to consumers to purchase energy-efficient hybrid, clean diesel and fuel cell vehicles.

In the gas tank
The law includes the Renewable Fuel Standard (RFS), a mandate to produce 36 billion gallons of renewable fuels by 2022, a five-fold increase over the current standard, including a 16-billion gallon cellulosic biofuels requirement. Cellulosic biofuels are those made from plant material such as grass and wood chips. As an incentive to fast track production of more cellulosic ethanol, one gallon will be counted as 2.5 gallons of renewable fuel through 2015.

Conventional biofuels must generate 20 percent fewer greenhouse gases than gasoline, and advanced and cellulosic fuels must generate 50 percent and 60 percent less, respectively. “Advanced biofuels” include ethanol derived from sources other than corn, ethanol waste material, biodiesel, biogas (including landfill gas, syngas and sewage treatment gas) and higher alcohols (propanol, butanol, etc.) converted from renewable biomass. This provision will undoubtedly encourage increased production of those alternative fuels that can be produced cleanly and cost-effectively.

Despite the mandated percentage of advanced biofuels, production of corn-based ethanol will need to be stepped up over the next 14 years. The bill also contains credits for changing from coal or natural gas to renewable energy sources to power biofuel production.

These targets and incentives help ensure that the renewable fuel standard would have a net-positive impact on climate, taking into account land conversion and full lifecycle impacts of ethanol production.
As a result of the Renewable Fuel Standards, expect steady conversion to ethanol-ready fuel stations and deeper investigation into building ethanol pipelines (see “Traditional Energy Goes with the Flow” in this issue).
In our cities

The bill mandates new energy efficiency standards for Federal buildings and other public buildings such as schools. New and significantly renovated Federal buildings are required to decrease energy use by 5% from 2007 to 2008 and decrease 3% every year thereafter through 2015. When compared to similar buildings built in 2003, new Federal buildings must be designed to use 50% less energy for 2008, improve by 10% by 2010 and an additional 10% every five years up to 100% by 2030. At that point they will be considered “carbon-neutral” and will dramatically reduce the amount of greenhouse gases emitted by the built environment.

At home
By 2020, light bulbs will have to be at least three times more efficient than they are now. To put that into perspective, compact fluorescent bulbs already meet that efficiency standard. The bill even offers a $10,000,000 cash prize for the development of a high-efficiency, solid-state light bulb. The bill dictates new energy standards for appliances, electric motors, furnaces, boilers, cooling systems, and consumer products and offers tax incentives to encourage the purchase of more energy-efficient products including residential solar energy systems.

This new set of mandates and incentives will cause many manufacturing companies and industries to set new priorities—many of which affect consumers directly. Hopefully, those of us who have been slow to adopt energy-saving habits will see government mandates as proof of the seriousness of the situation0 and take bigger steps to conserve energy on their own.

We want to know what you think.
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