state department cooperation in hemispheric alternative energy: lessons by: matthew mcmanus division...
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State Department Cooperation in Hemispheric Alternative Energy: Lessons
by:Matthew McManus
Division Chief, Energy Producer Country Affairs
U.S. Department of State
Overview
Why Biofuels are Strategic U.S. Domestic Initiatives U.S. & International Cooperation Case Study: Biofuels in the Dominican
Republic Sugar vs. Fuel Ethanol:
a case for both
Strategic Value of Biofuels Biofuels are renewable & can be sustainably developed
Biofuels have a lower carbon footprint than conventional fossil fuels Final EPA Rulemaking quantifies the reduced environmental impact of key
biofuels, including lower lifecycle GHG – sugarcane ethanol by up to 61%, corn around 20%.
Greater than 40 percent reduction in most tailpipe emissions. Biofuels can be cultivated using proven agricultural methods on existing land
Biofuels Increase American Energy Security, Economy U.S. largest oil user, at 18 mmbd; oil use trending down sharply, down 2 mmbd in
two yrs. China growing, now consumes about half as much as U.S. does. U.S. is world’s largest oil importer, but 40% CAFÉ increase/biofuels reducing
demand. Biofuels now represent nearly 10 percent of US Gasoline supplies; EPA reviewing
increase to 15 % blending. Equal to our fourth largest “foreign” supplier… Balance of payments, trade, economic benefits for USA
Biofuels: global implications Best practices are being shared among interested countries and regions
U.S. Domestic Renewable Energy EffortsAmerican Recovery & Reinvestment Act (ARRA)
Enacted in February 2009 $36.7B in Energy and Efficiency Funding R&D, Commercialization of Renewable Energy
& Research $4B Loan Guarantees for Renewable Energy $0.4B Advanced Research Projects- Energy
http://www.DOE.gov ARRA Funding Projects
U.S. Investments into Renewable EnergyDOE Allocation of (ARRA) Renewable Energy Funds
Energy Efficiency Projects (up to $17B) Geothermal ($350MM with equal matching) Solar and Wind ($500MM) Fuel Cells & Hydrogen ($400MM) Biofuels Projects
Algae and Advanced Biofuels (up to $85MM) Cellulosic/Biorefineries (more than $600MM)
Hydroelectric Infrastructure Smartgrid Tidal
http://www.DOE.gov ARRA Funding Projects
International Cooperation on Biofuels
Brazil-US MOU to Advance Cooperation on Biofuels Joint Development on R&D of Next Generation Harmonize Standards to permit expansion of Global Biofuel Market Assisting 3rd countries in CenAm/Caribbean w/ Biofuels
Dominican Republic, El Salvador, Guatemala, Haiti, Jamaica. Most oil dependent region in world – imported oil for maritime,
aviation, road and electric power needs. Goal is to substitute locally grown commodity for imported one,
starting with E10 blending. Jamaica introduced E10 blends this year; DR pending and ES
legislating. U.S/OAS Feasibility Studies and Technical Assistance. Brazilian,
Vargas Foundation, Agronomy Studies.
A sample of ethanol blending around the world
Country Blend Policy
Brazil E20-E25
Mandated
Paraguay E12 Mandated
U.S.A. E10 Mandated (10 states) Optional (40 states)2/3 of supply blended
Columbia E10 Mandated
Jamaica E10 Mandated
Costa Rica E7 Mandated
Country Blend Policy
Canada E5 – E10
Optional
Australia E10 Optional
China E10 Ten Provinces
France E10 Optional
India E5 Mandated
These charts are unofficial and based on second hand sources, and are intended merely to show directional adoption of ethanol fuels. Additionally, many other countries have legislation or policy work pending to address adoption of some blends of biofuels
Biofuels in the Dominican Republic
POLICY: Renewable Energy Law, Law 57-07 (2007) Introduces ethanol for motor fuel
DIVERSIFICATION OF ENERGY SUPPLIES: Opportunity to improve energy security with some domestic production Opportunity to introduce clean energy into the domestic energy matrix
ECONOMIC GROWTH: Potential to add jobs & generate additional revenues
AGRICULTURAL EXPERTISE & POTENTIAL: As a regional leader in sugar, the Dominican Republic has tremendous
experience and skill in a strategic crop There exists the potential to make use of un-used or fallow land
REGIONAL LEADERSHIP: Can leverage support of Brazil and U.S. to be a Caribbean leader in domestic
biofuels use.
The Dominican Republic has an opportunity to implement an effective domestic biofuels campaign
Utilizing Sugarcane to produce Sugar AND Ethanol
Permits increased market flexibility by diversification
Permits a more robust energy strategy
Capitalizes on available land and regional expertise
Benefits from international expertise and cooperation
A responsible and calculated diversification of cane production to serve both the food and energy markets could be advantageous to
the Dominican Republic
Room enough for BothSugar and Ethanol
Jan-04 May-05 Oct-06 Feb-08 Jul-09 Nov-100
5
10
15
20
25
30
0
0.5
1
1.5
2
2.5
3
3.5
4
sugar ethanol
SU
GA
R ¢
/lb
ET
HA
NO
L $
/ga
l
• A break-point line concept helps identify when conditions are economically favorable for a given end-use• Market conditions will change constantly, but both sugar and fuel ethanol will maintain strong support
Room enough for BothSugar and Ethanol
Jan-04 May-05 Oct-06 Feb-08 Jul-09 Nov-100
5
10
15
20
25
30
sugar ethanol
SU
GA
R ¢
/lb
ET
HA
NO
L $
/ga
l
• A horizontal break-point line concept helps identify when conditions are economically favorable for a given end-use
• Market conditions will change constantly, but both sugar and fuel ethanol will maintain strong support
Conclusions Biofuels have national security, energy security, balance of
trade and economic benefits to the U.S. Amidst declines in U.S. crude oil use, growing auto
efficiency and biofuels use reduces our foreign oil dependence
EPA has reviewed lifecycle GHG emissions. DOE is working to promote next generation and advanced
biofuels. State is working with Brazil to advance global uptake of
biofuels, and to partner with oil dependent countries to assist them to produce biofuels for their domestic market.
Thank you!