2014/07/16 Council Agenda Packet

and/or reduce the carbon content of fuels. As such, while the assumptions for each category are fully described separately in Section 1, the methodology used to apply each assumption takes into account the overlapping nature of the improvements and modifies accordingly so as to avoid double counting of benefits. This is more fully described in Section 2. 1C. Reduction of Carbon Intensity of Fuels (i.e., Alternative Fuels) The third supposition regarding the potential for improvements to the vehicle fleet in the Puget Sound region was what opportunities to reduce the carbon content of fuel might be possible by 2040. Research conducted on this topic included studies and analyses conducted by the following agencies or institutions (a full bibliography of sources is included at the end of this white paper): • Washington State Department of Ecology • California Air Resources Board • University of California at Berkeley • University of California at Davis • U.S. EPA • Western States Petroleum Association • U.S. Department of Energy • Pew Center on Global Climate Change Several states around the country are researching the benefits and costs of implementing a low carbon fuel standard, and many states have also adopted legislation related to alternative and renewable fuels. Most notably, the three West Coast states of California, Oregon and Washington are each pursuing these strategies to varying degrees. California, for example, is in the process of establishing a low carbon fuel standard that would reduce the carbon intensity of passenger vehicle fuels by at least 10% by 2020. As mentioned previously, Washington State has passed legislation requiring the use of alternative fuels in state fleets, as well as legislation related to renewable fuel standards. Washington State is also currently in the process of researching a low carbon fuel standard, assessing options and their applicability for Washington State. Perhaps more so than with any of the other categories of technological improvements, the potential to reduce the carbon intensity of fuel relies on many other strategies that are already captured within the other categories, particularly those of improved vehicle fuel economy and an influx of electric or hybrid vehicles into the fleet. However, our research suggests that there are additional benefits that could be achieved through further pursuit of alternative fuels such as ethanol, biodiesel, hydrogen fuel cells, etc. For example, EPA just recently finalized a renewable fuels standard that will increase the required volumes of renewable fuel to 36 billion gallons by 2022. Given the national, regional and state interest in pursuing alternative and renewable fuels, we categorized the potential for advances in reducing the carbon intensity of fuel in the Puget Sound region by 2040 into the two scenarios below. It is important to note that the scenarios are based on the total assumed reduction of carbon intensity in the fuel supply, inclusive of all possible strategies for achieving these targets. Issues related to overlapping strategies are addressed in Section 2, which modifies the application of these estimates accordingly so as to avoid double counting of benefits. • Likely Scenario: 10% This scenario is comprised of a fairly conservative assumption that by 2040, a 10% reduction in the carbon intensity of fuel can be achieved in the Puget Sound region. Given the actions already taken by Washington State related to fuels, and the recent passage of a national program on renewable fuels, it is likely that a 10% additional reduction over the next 30 years will be possible. • Aggressive Scenario: 25% This scenario is comprised of a more aggressive assumption that by 2040, a 25% reduction in the carbon intensity of fuel can be achieved in the Puget Sound region. This scenario assumes that an even more aggressive pursuit of alternative and renewable fuels, including the possibility of new technologies such as hydrogen fuel cells, is possible over the next 30 years. As an example, EPA's "A Wedge Analysis of the U.S. Transportation Sector" study looked at varying levels of both corn and cellulosic ethanol in the market by 2050, up to 90 billion gallons compared to 9 billion gallons produced in 2008. The U.S. Department of Energy is also pursuing research into hydrogen fuel cells. Their Fuel Cell Technologies Program coordinates L-5 Appendix L: Climate Change Background