Biofuels and Plug-In Hybrid Electric Vehicles (PHEVs) - A Route to Energy Independence

Driving Our Way to Energy Independence

This March 2008 report describes how currently commercially available technologies could transform our petroleum powered transportation system into one powered by electricity and biofuels. Provisions in the recently passed Energy Act could accelerate that transformation. With the adoption of complementary policies, the revolution in our transportation sector can generate an equally profound revolution in our electricity sector. Hundreds of thousands of locally owned wind turbines and solar electric arrays supplying flexible fueled, plug-in hybrid vehicles can allow tens of millions of Americans to become energy producers not just energy consumers.

In January 2004, we published A Bether Way to Get From Here to There, a report describing a promising domestic energy strategy that relies on biofuels and plug-in hybrid electric vehicles (PHEV) as a solution moving the U.S. towards energy independence. Eighteen months later, the two pronged biofuels/PHEV concept is increasingly heard in public discussions but the path forward is not often illuminated. Our 2008 report, Driving Our Way to Energy Independence, provides a technology update and will show policymakers the way to put the idea into action.

Extending the HEVs electricity-only driving range should be accompanied by a simultaneous strategy that expands the use of renewable energy to fuel both the motor and the engine. On the electricity side, this means dramatically expanding the generation of electricity using wind, sunlight and other renewable fuels. On the engine side it means dramatically expanding the use of biofuels.

And simply having a renewable energy or biofuels stategy shouldn't be the end. The biofuels policies should support broad farmer ownership of the manufacturing facilities. A 2006 paper by David Morris, Ownership Matters: Three Steps to Ensure a Biofuels Industry That Truly Benefits Rural America, provides a snapshot of today's biofuels industry and a roadmap to ensure that local farmers see significant benefits from the expanding industry in the future. Farmers who own a share of ethanol plants can earn several times more per bushel of corn delivered than their neighbors who only sell their corn to ethanol plants.

On the electricity side, policies that support locally owned renewable energy projects should be encouraged [see Minnesota's C-BED Tariff example]. Farmers and landowners who own a wind turbine can earn many times more than those that simply lease their land to wind developers.

Some of the ideas above have been put into practice with the May 31, 2006, enactment of a new law in Minnesota (HF 3718). 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.

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.

More:

• Electric Avenue - by David Morris, Travel+Leisure Magazine, November 2007
  A new kind of hybrid uses less gas and more electricity. All-electric cars are already here. What will this mean for the road trip of the future? David Morris plugs in.
• Kicking Our Oil Addiction: Minnesota Becomes First State to Endorse an Electric-Alcohol Strategy - ILSR press release, June 8, 2006
• Full Text of Minnesota's Flexible Fueled, plug-in hybrid vehicle law [HF 3718] - enacted May 31, 2006
• Original Flex-Fuel, Plug-In Hybrid Electric Vehicle Legislation - introduced in Minnesota legislature, March 20, 2006.
• Turn on the Electric Road - by David Morris, published in the NY Times, October 8, 2006
• Ford Should Build Flexible Fueled, Plug in Hybrids - published on Ford's Bold Moves, July 27, 2006