New Study Finds Low-Carbon Fuels Policy Essential to Michigan's Leadership Role in Breaking America's Oil Addiction:

Innovative Clean Fuels Legislation ("Low Carbon Fuel Standard") To Be Introduced in Michigan Legislature

For Immediate Release: September 8, 2009

Ann Arbor, MI—By redirecting even a portion of the over $14 billion that leaves our economy each year to import petroleum products, Michigan could become a leader in developing and using sustainable homegrown fuels and advanced battery technologies. Moving Michigan Beyond Oil: Fueling Our Transportation While Growing Jobs and Reducing Global Warming Pollution, released today by two of the state’s leading environmental organizations along with political and academic leaders, evaluates the contenders in the alternative fuels race and finds that the key policy action to establish Michigan’s leadership role in this emerging market is enactment of a “low-carbon fuel standard” (LCFS). The report concludes that an LCFS and related policies are the best way to keep Michigan’s transportation energy expenditures here at home, where they can help grow the state’s economy and create new jobs.

“We need to leverage our emerging strengths in manufacturing advanced batteries for vehicles and sustainably-harvested biofuels,” said State Representative Lee Gonzales (Flint). “This report shows that Michigan can and should lead the way in helping create a market for these technologies. I look forward to introducing a low-carbon fuel standard as the cornerstone of that effort.”

A “low-carbon fuel standard” requires oil refineries and fuel blenders to lower the greenhouse gas emissions of the fuels they sell over time (e.g., a 10% reduction by 2020), working in a manner similar to a renewable energy (portfolio) standard in the electricity sector. A carbon-based metric, backed by environmental sustainability standards, would encourage development of the most promising fuels while discouraging petroleum replacements that could be just as damaging, or worse, ecologically and economically. Moving Michigan Beyond Oil found that the two lowest carbon and economically promising transportation fuels are cellulosic ethanol and electricity for next generation electric and plug-in hybrid electric vehicles.

“Michigan has already provided significant support to help build a Michigan-based advanced battery and biofuels industry,” stated Charles Griffith, report co-author & Ecology Center’s Clean Vehicles and Fuels Director. “But policies like a low-carbon fuel standard are now needed to stimulate the demand that will ensure a growing market for our products.”

As home to two of the country’s leading next generation biofuels projects as well as auto companies that have led investment in “flex-fuel vehicle” technology, Michigan has the most to gain from the use of sustainably harvested, next-generation biofuels. An LCFS provides strong incentives for doing biofuels right by reducing carbon intensity and related environmental issues. Our diverse agricultural sector and unique technological capability as well as the resources we’ve already put into attracting cellulosic ethanol development ensure that Michigan will benefit from increased use of homegrown fuels.

“Michigan is uniquely qualified to contribute to and benefit from the emerging bioeconomy,” stated Steve Pueppke, Director of MSU’S Office of Bio-Based Economy. “Policy drivers are needed to help move biobased technologies from the lab to the fuel tank.”

After a detailed analysis of costs and benefits, the report gives a “green light” to electricity and cellulosic biofuels to fuel Michigan’s transportation needs, and a “red light” to coal-to-liquid schemes. Receiving the “yellow light” are corn-based ethanol, biodiesel, natural gas and hydrogen, which all have significant environmental and economic potential yet also have significant drawbacks and risks.

“For Michigan to be on the cutting edge and reap the benefits from low-carbon fuels, we have to provide incentives for the cleanest, most sustainable fuels while discouraging the more polluting pathways,” stated Monica Patel, report co-author and Research Analyst for the Ecology Center.

Moving Michigan Beyond Oil finds that policies requiring decreased carbon-intensity in our fuel supply will reduce Michigan’s vulnerability to oil price shocks by encouraging the production of more of our own fuel. The report also suggests that such policies are the best way to keep Michigan’s energy expenditures here, where they can help grow the state’s economy and create new jobs. Approximately 70% of every dollar spent on energy currently leaves the state, and re-directing even a portion of the more than $14 billion spent on petroleum imports to development of low-carbon fuels would deliver significant positive economic benefits.

“Michigan must be ready to lead the nation and world into a low carbon future,” stated Shelley Vinyard, report co-author and Policy Associate at Environment Michigan Research & Policy Center. “By focusing on low carbon fuels, we can establish a niche that will payoff both economically and ecologically. One thing is clear: Michigan has little time to lose in addressing these challenges.”

A full copy of the report as well as a two-page summary (with a high-resolution chart depicting the analysis of each fuel source) is available at http://ecocenter.org/cleancar/beyondoil.php. All graphics in the report are available in high-resolution for reproduction in media sources.

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For press questions, please contact:

Mike Shriberg, Ecology Center: 734-761-3186 x108
Shelley Vinyard, Environment Michigan: 734-662-9797
State Representative Lee Gonzales: 517-373-7515