A 100 Percent Renewable Fueled

Transportation SystemDavid MorrisVice President

Institute for Local Self-Reliancedmorris@ilsr.org

Governors’ Ethanol CoalitionMarch 1, 2005

Washington, D.C.

•The U.S. can produce at least 100 Billion gallons of ethanol per year on a sustainable basis

•A 100% renewable-fueled transportation system requires a dual electricity/liquid fuel propulsion system

•Biofuels production significantly benefits farmers and rural areas only when biorefineries are farmer-owned

The Argument

The Prospects for Ethanol

U.S. Ethanol Production Has Tripled Since 2001

Gallons

U.S. and Brazilian Ethanol Production

U.S. ethanol facilities are centered in corn states

The U.S. can produce at least 100 billion gallons of ethanol

on a sustainable basis

Gallons5 DT/acre

Oil receives 3-30x more subsidies than ethanol

Source: Institute for Local Self-Reliance-Oil Data, 1996; Ethanol Data, 2004

An ethanol strategy costs far less than a hydrogen

strategyComponen

t H2 EtOHFuel(GGE)/

future $5/$2.50 $1.70-2.15Vehicle(Incremental Cost/future

$200k/$10k(FC)

$150(FFV)

Fueling Station/# cars per day $500k/10 $50k/200

Storage/Incremental

Cost)? $0

The Need for Electricity

Gasoline consumption is increasing 4x faster than

ethanol consumption(2002-2005)

Gallons

A hybrid future?

Source: IEA March 2004

% of car sales

Plug-in hybrids promise the most efficient

transportation system

mpg-equiv.

Electricity can provide up to 100 percent of vehicle

fuel

%

•Electricity for motors-Renewable Portfolio Standard(e.g. wind, PV, biomass, hydro, etc.)

•Engine fuel-Renewable Energy Standard(e.g. biomass, water, etc.)

A dual renewable fuel strategy for transportation

Maximizing the Benefit to

Agriculture

Additional revenue to farmers

from ethanol sales

# of Plantsmid-2005

Farmer-owned refineries account for almost half of all U.S. ethanol

plants

98

48

Farmer-owned plants produce more ethanol

than ADM

Minnesota Model•Producer Payment-20 cents per gallon•In-state•Up to 15 million gallons a year•For 10 years

•Result•15 plants as of November 2004•About 9,000 farmer owners•Producer payment ending on 75%

of production as of 2006

Transportation fuel could dominate agriculture

markets

Tons

13M

The U.S. Carbohydrate Economy(circa 2050)

Feedstock(tons) 1,000,000,000Ethanol(gals) 80,000,000,000

Chemicals(tons) 250,000,000Fossil Energy

Input 0# of

Biorefineries 2,000# of Owners 1,200,000