San Francisco Mayor Directs City To Use Biodiesel Fuel Blends

By executive directive, Mayor Gavin Newsom has ordered diesel vehicles in use by San Francisco's public agencies must use at least a 20 percent biodiesel (B20) blend by the end of 2007. The City currently uses about 8 million gallons of diesel fuel each year.

Several City departments and agencies are already using B20, including San Francisco Airport, Department of Public Works, MUNI buses, and the San Francisco Zoo. Ferries operating out of San Francisco have also used B20 with excellent results.

According to the National Biodiesel Board (NBB), San Francisco is now the largest U.S. city to institute such a broad directive for biodiesel use. Since 1999, the City's Healthy Air and Smog Prevention ordinance has established requirements to purchase vehicles using alternative fuels or energy-efficient vehicles with low emissions. San Francisco now has more than 800 alternative fuel vehicles in its fleets.

The directive states in part:

• Department fleet managers shall identify applications that can most quickly be transitioned to biodiesel.
  
• All diesel-using departments shall draft a report listing all diesel vehicles and diesel equipment by July 1, 2006.
  
• All diesel-using departments shall begin using a B20 biodiesel blend as soon as practicable in all diesel vehicles and other diesel equipment, with the following incremental goals in each department's use of B20: Initiate and complete biodiesel pilot project by December 31, 2006; 25% by March 31, 2007; and 100% by December 31, 2007.
  
• Departments shall then pursue actions to use greater-than 20% blends including neat biodiesel (B100).

By virtue of the power and authority vested in me by Section 3.100 of the San Francisco Charter to provide administration and oversight of all departments and governmental units in the executive branch of the City and County of San Francisco, I do hereby issue this Executive Directive to become effective immediately:

1.  The City declares its commitment to increasing the pace of municipal use of biodiesel.

San Francisco City Government has long led the country in its commitment to alternative transportation fuels as a key part of its efforts to attain clean air, promote renewable energy and reduce greenhouse gas emissions. 

Since 1999, the City’s Healthy Air and Smog Prevention ordinance and more recently my Executive Directive 5-103 issued in September 2005, have established requirements for City fleets to purchase vehicles using alternative fuels or energy-efficient vehicles with low emissions. San Francisco now has more than 800 alternative fuel vehicles in its fleet.

In 2005, Senator Barbara Boxer awarded the San Francisco Department of Environment her Conservation Champion Award, citing the City’s alternative fuel vehicles success record.

The Board of Supervisors recently passed, and I signed, legislation to create a Biodiesel Access Taskforce, the first of its kind in the nation, to streamline regulations and create incentives for private-sector use of biodiesel.

Several City departments and agencies have successfully tested and used biodiesel in pilot programs using B20 (a blend of 20% biodiesel and 80% petroleum diesel) or higher biodiesel blends, including San Francisco Airport, Department of Public Works, MUNI, and the San Francisco Zoo. Ferries operating out of San Francisco have also tested B20 with excellent results.

The San Francisco Fire Department is initiating this week a 6-month pilot program to test and monitor the use of B20 in 9 Fire Department apparatus located in the southeastern section of San Francisco, an area that consistently experiences the City’s poorest air quality.  Upon successful completion of the pilot program, the Fire Department expects to expand the use of biodiesel throughout the City.

2. Increased municipal use of Biodiesel will result in numerous environmental benefits, including:

• reduced petroleum consumption: the City’s municipal fleet currently uses approximately 8 million gallons of petroleum diesel each year.  City-wide use of B20 in the municipal fleet will reduce petroleum consumption by approximately 1.6 million gallons.
• cleaner air:  the use of B20 will significantly reduce emissions of particulate matter, carbon monoxide, hydrocarbons and toxic air pollutants.
• reduced greenhouse gas emissions:  bodiesel has been found to reduce carbon dioxide emissions by up to 78% compared to petroleum diesel, on a life-cycle basis.
• promotion of sustainable and locally produced biodiesel:  most biodiesel is made from virgin plant oils and it is a priority of the City to encourage sustainable agricultural practices in the growing of plant oils for biodiesel.  Biodiesel can also be made from recycled sources, including waste oil and animal fats from restaurants.  The City is working with several local companies to facilitate the production of biodiesel from these local renewable sources.
• promotion of biodiesel markets:  the City’s leadership will help enable the use of cleaner burning, renewable biodiesel by the City’s residents and businesses.

3. Departments shall advance biodiesel use by taking the following actions:

• Central Shops and individual department fleet managers shall identify vehicle and equipment applications that can most quickly be transitioned to biodiesel, and shall make any necessary preparations for biodiesel use, including modifications to engines or cleaning of existing diesel storage tanks.
• All diesel-using departments shall draft a report listing all diesel vehicles and diesel equipment and send it to Department of Environment, with a copy to my office, by July 1st, 2006. The Department of Environment and Central Shops shall identify additional related information to be included in the report and notify the departments of those requirements no later than May 31, 2006.
• All diesel-using departments shall begin using a B20 biodiesel blend as soon as practicable in all diesel vehicles and other diesel equipment, with the following incremental goals in each department’s use of B20:

• initiate and complete biodiesel pilot project by December 31, 2006;
• 25% by March 31, 2007; and
• 100% by December 31, 2007.

• All diesel-using departments shall then pursue further increases in the use of biodiesel through the use of greater-than 20% blends and/or neat biodiesel (B100).
• Using SF STAT and CCSF Fleet Inventory, all diesel-using departments shall report annually on July 1st (beginning July 1st, 2007) on departmental progress with biodiesel use.  This report shall be sent to the Department of the Environment and shall include:

• the number of diesel vehicles and other diesel equipment owned by the department;
• the number of diesel vehicles and diesel equipment running on biodiesel and what blend of biodiesel those vehicles are using;
• the amount of biodiesel (on a neat/B100 basis) used by the department; and
• a description of the department’s experience with biodiesel, including information related to improved air quality and any operational or maintenance issues.

• The Department of Environment shall prepare a yearly, consolidated report each September 30th on the efforts that diesel-using departments are making towards achieving the City’s biodiesel goals.

For more information, please contact the Clean Air Program at the Department of the Environment at (415) 355-3700.

Gavin Newsom
Mayor

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November Ballot Initiative Would Tax Oil and Fund Renewables

After supporters gathered more than 1.1 million signatures, California voters will see an interesting measure on the November 7, 2006, ballot. The "Clean Alternative Energy Act Initiative" would assess a 1.5-6.0 percent tax on oil companies operating in California to fund alternative fuels and renewable energy development.

The initiative will fund a nearly $4 billion effort ($200 - $380 million/yr for 10 years) from the imposition of a severance tax on oil production, to be used to fund a variety of new alternative energy programs. to reduce California's dependence on gasoline and diesel by 25 percent over the next 10 years by making alternative fuel vehicles and alternative fuels more widely affordable and accessible to consumers. The program will be funded by an assessment on the extraction of oil in California, paid for by oil companies that drill in California. The assessment is based on a sliding scale, based on the price per barrel of California crude oil at the wellhead. If the Initiative were enacted now, the assessment would be 4.5 percent, based on the current closing price of California oil ($58.00 per barrel, as of Friday, June 16).

California is the 3rd largest oil-producing state in the nation, yet is the only major oil-producing state without a comparable resource depletion assessment to reimburse Californians for the use of their natural resources. Oil companies pay similar assessments in every other major oil-producing state, including Alaska (15 percent), Texas (4.6 percent), Louisiana (12.5 percent) and New Mexico (3.8 percent).

According to the California Legislative Analyst's Office, the proposal would work as follows:

Beginning in January 2007, the measure would impose a severance tax on oil production in California. (The term severance tax is commonly used to describe a tax on the production of any mineral or product taken from the ground, including oil.) The measure defines “producers,” who are required to pay the tax, broadly to include any person who extracts oil from the ground or water, owns or manages an oil well, or owns a royalty interest in oil. The severance tax would not apply to oil production on state lands (which includes offshore production within three miles of the coast) and would not apply to federal production (offshore production beyond three miles from the coast and production on federal lands in the state). Additionally, the severance tax would not apply to oil wells that produce less than ten barrels of oil per day (“stripper wells”), unless the price of oil at the well head was above $50 per barrel. At current levels of production, the tax would apply to about 165 million barrels of oil produced in the state annually.

The measure states that the tax would be “applied to all portions of the gross value of each barrel of oil severed as follows:”

• 1.5 percent of the gross value of oil from $10 to $25 per barrel.
• 3.0 percent of the gross value of oil from $25.01 to $40 per barrel.
• 4.5 percent of the gross value of oil from $40.01 to $60 per barrel.
• 6.0 percent of the gross value of oil above $60.01 per barrel and above.

The text of the proposal contains the following funding breakdown:

• Gasoline and Diesel Use Reduction Account (57.50 percent - for market-based incentives (consumer loans, grants, and subsidies) for the purchase of alternative fuel vehicles, incentives for producers to supply alternative fuels, incentives for the production of alternative fuel infrastructure (for example, fueling stations), and grants and loans for private research into alternative fuels and alternative fuel vehicles.
• Research and Innovation Acceleration Account (26.75 percent) - for grants to California universities to improve the economic viability and accelerate the commercialization of renewable energy technologies and energy efficiency technologies.
• Commercialization Acceleration Account (9.75 percent) - for incentives to fund the start-up costs and accelerate the production of petroleum reduction, renewable energy, energy efficiency, and alternative fuel technologies.
• Public Education and Administration Account (3.50 percent) - for public education campaigns, oil market monitoring, and general administration. Of the 3.5 percent, at least 28.5 percent must be spent for public education, leaving a maximum of 71.5 percent of the 3.5 percent (or roughly 2.5 percent of total revenues) for the Authority’s administrative costs.
• Vocational Training Account (2.50 percent) - for job training at community colleges to train students to work with new alternative energy technologies.

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The New Ethanol Future Demands a New Public Policy

ILSR's David Morris believes that U.S. government programs supporting ethanol need to be refocused on farmers and local ownership and be broadened to include other renewable fuels. His opinion piece in today's New York Times is expanded here in a paper titled, The New Ethanol Future Demands a New Public Policy.

More:

• Full Text: The New Ethanol Future Demands a New Public Policy - by David Morris, June 21, 2006 [expanded version of NY Times opinion column - see also PDF Format]
  
• Full Text: An Ear for the Market - by David Morris, New York Times, June 21, 2006

British Government Aims to Be Climate Neutral By 2012

All UK central government departments and their agencies will be carbon neutral within six years in an attempt to model environmentally sustainable behavior to business and consumers. Once carbon neutrality is reached, the government has set an additional target to reduce carbon emissions from government offices by 30 percent by the year 2020.

The measures to make government buildings carbon neutral will save at estimated 800,000 metric tons of carbon by 2012 - the equivalent of taking 750,000 cars off the road.

The new UK initiative was launched to coincide with the release of a report by the Sustainable Procurement Task Force. Chairperson, Sir Neville Simms, said "The message from the Task Force is simple: this is worth doing, it is not difficult, it will not cost more in the medium term and the dividends it will bring in the long term are clear.”

The government will also be working to reduce water consumption by 25 percent and to increase energy efficiency by 30 percent per square metre by 2020. The Government has already introduced carbon offsetting mandate for official air travel.

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UK Requires Energy Performance Ratings Before Selling Your Home

Starting in June 2007, home buyers in England will be able to look at an energy performance certificate [EPC] for the property before they purchase it. The assessment will advise consumers on which energy measures - ranging from insulation to solar panels - could cut carbon emissions from their home and improve their energy rating.

The adoption of this program in the UK will put them out ahead of an EU directive requiring that all homes for sale should have energy certificates as of 2009 [see EU Directive on the Energy Performance of Buildings].

Each home will receive an A to G grade for their home's energy efficiency and carbon emissions. The certificate will tell them current average costs for heating, hot water and lighting in their home as well as how to cut costs with energy efficiency measures. Below is a sample of a chart that will be included in the report [a complete sample report is available here.]

The EPC will include practical information about a range of economical measures that could be installed. It will also list measures to cut carbon emissions even further such as solar panels or wind turbines, where applicable.

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Minnesota Becomes First State to Endorse an Electric-Alcohol Transportation Strategy

A new law puts Minnesota on the path towards reducing its reliance on oil by embracing a transportation strategy based on flexible-fueled, plug-in hybrid electric vehicles (PHEVs).

Minnesota Governor Tim Pawlenty has signed into law H.F. 3718, the nation’s first law promoting plug-in hybrid, flexible-fueled vehicles.

The legislation – inspired by the Institute for Local Self-Reliance's report A Better Way that proposed an electricity-alcohol transportation energy strategy, and several articles by ILSR staff published in the Minneapolis Star Tribune in late 2005 – sailed through both houses by a unanimous vote.

“Both conservative Republicans and liberal Democrats understand that this is the only near term strategy available that can cure us of our oil addiction,” notes David Morris, ILSR’s Vice President, who testified as an expert witness before six legislative committees.

The law instructs the state to buy plug-in hybrids on a preferred basis when they become available. It also encourages Minnesota State University-Mankato to develop flex-fuel plug-in hybrid vehicles, and creates a task force consisting of business, government and utility representatives to develop a strategy for using, and producing such vehicles in Minnesota.

A plug-in hybrid can run primarily on electricity, which inherently reduces oil consumption. “Only three percent of our electricity is generated from oil,” Morris observes, “And many states are requiring an increasing percentage of renewable electricity.” Renewable fuels like ethanol would provide the primary energy source for the vehicle’s engine.

“Minnesota has the resources necessary to make flexible fuel plug-in hybrid production a reality," says Frank Hornstein, the bill's chief House author. "We have the research at Minnesota State-Mankato. We have the corn and ethanol industry. We have a growing number of wind farms. And we have the Ford plant."

"Ford has said it will close the plant. The task force can help us develop new opportunities," notes Scott Dibble, the bill's chief Senate author. "We could have a technology developed in Minnesota and built at the Ford Plant, which already runs on renewable energy generated at the plant's hydroelectric dam on the Mississippi river."

Note from New Rules: For those states that may want to copy the Minnesota policy initiative, we feel that an earlier version of the Minnesota legislation might be better. The primary differences is that the earlier bill contained stronger direction for the state to build up the numbers of flex-fueled vehicles that are sold in the state and it had a requirement for the state to establish a regulatory investigation into the technical and economic aspects of allowing PHEV's to interconnect with the utility grid and supply electricity to electric utilties. The regulatory proceeding would have also required an innovative pricing scheme, providing PHEV owners a discounted rate for recharging PHEVs during off-peak hours. The original bill also contained targets for the numbers of PHEVs the state must purchase.

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