Blog Archive for February, 2012
Illinois eyes efficiency gains through building code
A blower door test is a way of measuring how airtight, and therefore energy-efficient, a house is. (Photo by Brandon Stafford via Creative Commons)
Illinois is on track to become the first state in the Midwest to require new homes pass a blower door test and meet rigorous new standards for air tightness and insulation.
The requirements are among the expected changes to the state’s building code that are due to be finalized this summer and implemented early next year.
The dry and technical subject of building codes has become a cornerstone issue for some energy efficiency advocates in recent years. The Midwest Energy Efficiency Alliance (MEEA), for example, made building codes a priority in 2008 and played a central role in upgrading Illinois’ rules (MEEA is a member of RE-AMP, which also funds Midwest Energy News).
Building codes are the sets of state or local rules that spell out the technical requirements for building design and construction. While they lack the flash of solar panels or electric vehicles, building codes can significantly reduce energy consumption by mandating subtle, often invisible improvements to buildings using commonly available tools and techniques.
About 40 percent of U.S. energy consumption goes toward heating, cooling, and providing power to buildings.
Under the rules being implemented in Illinois, homes will be 15 percent more energy efficient than those built under the 2009 version of the same code, which were 15 percent more efficient than those built under the 2006 version.
The Home Builders Association of Illinois, however, objects to the code changes, saying they add to the cost of construction and are updating faster than developers and code officials can keep up.
Following international standards
The codes come from an organization called the International Code Council, which publishes an updated version of its International Energy Conservation Code (IECC) every three years. A parallel energy conservation code for commercial buildings is issued every three years by an organization called ASHRAE. With each update, the rules require more energy conservation.
According to the New Buildings Institute, the 2012 IECC rules include energy efficiency improvements of up to 30 percent compared to conventional building practices.
The Energy Policy Act of 2005 requires states to review and consider adopting the most current IECC and ASHRAE codes, but they aren’t required to use them. The Midwest lags the coasts in adoption. Some states have no energy codes and leave it up to local governments to decide. Others have codes that haven’t been updated since 2006 or earlier.
When MEEA started working on energy codes in 2008, four states in its territory had pre-1999 codes in place, and Illinois had no residential code at all.
“This has become a huge priority issue for the Midwest, and I would say with the adoptions we’ve done we’re really leading the nation,” said Stacey Paradis, MEEA’s deputy director.
Its biggest success story, and the focus of its current work, is Illinois. With support from Environment Illinois, the Environmental Law and Policy Center and the American Institute of Architects, it helped pass the Illinois Energy Efficient Building Act in August 2009. The law, which took effect last year, requires state administrators to adopt the latest version of the IECC code — subject to review and comment — within a year of its publication.
The process of implementing the 2012 IECC rules is in the later administrative stages, said Isaac Elnecave, MEEA’s senior policy manager for building codes. The state is in line to become the second or third state to adopt the rules after Maryland and possibly Massachusetts.
“The big focus on adoption is getting Illinois across the finish line,” Elnecave said.
The state’s legislation will keep it perpeptually updating its energy code to the latest standards. In most Midwest states, legislation authorizes administrators to adopt an energy code but doesn’t specify how often it must be reviewed or updated. Nebraska requires legislative approval before newer energy codes can be adopted.
What happens now
Even though legislation isn’t typically needed to change the codes, updating them is still a political and often difficult undertaking. State homebuilder associations tend to oppose the changes, which create new rules for their members. Municipal government associations tend to oppose updates, too, because its members are the ones who enforce the codes.
“Homebuilders are not prepared for the code change,” said Bill Ward, director of government affairs for the Home Builders Association of Illinois.
The changes are coming faster than builders and code enforcers can learn them, Ward said, and they’re adding to the cost of construction. Complying with changes in the 2012 code will add $5,000 to the cost of constructing a typical 2,000 sq. ft. home, the association estimates.
Ward accused special interest groups of pushing for code changes so they can profit from educational seminars and sell products and materials required in the code. The homebuilders group is pushing for legislation that would delay implementation of the updated code.
Seth Sommer, a building code official in Rockford, Ill., said the reaction he’s heard from developers is mixed, as expected. Some are all for it. Others just want to know what it means so they can comply and move on.
“I think with education and outreach the difficulties will be a minimum,” Sommer wrote in an e-mail to Midwest Energy News. “[E]veryone generally understands that as a whole; we need to conserve energy.”
In the Midwest, Iowa, Indiana, Michigan, and Nebraska have the 2009 IECC rules in place, and Ohio is in the process of implementing the same standard. Minnesota and Wisconsin have the less efficient 2006 version in place. Kansas, Missouri and the Dakotas have no statewide energy code for buildings.
Even in states with advanced energy codes, the impact will be muted if training and enforcement isn’t also sufficient. Some states used stimulus funding to offer training sessions on new energy codes, but a long-term funding source remains elusive in many states.
“There’s still this challenge of where these training materials and education opportunities come from,” Paradis said.
The Illinois Department of Commerce and Economic Opportunity is putting on 30 multi-day trainings across the state as it prepares to implement 2012 IECC rules. MEEA is also working with a stakeholder group in Minnesota to conceive a partnership in which utilities would help fund training and enforcement of energy codes.
Residential Building Energy Code Adoption in the Midwest (Source: MEEA)
Correction: A previous version of this story misidentified the organizations that lead the push for passing Illinois’ Energy Efficient Building Act.
Why we freak out over gasoline prices
There’s no other commodity that gets more media attention than gasoline prices.
While we’re generally aware that major expenses like housing and health care are getting more costly, they don’t quite hold the same outrage factor.
Even a single-digit percentage change will inspire endless “Pain at the Pump” segments on local TV news. Here’s one that’s typical of the genre:
It’s also a perennial campaign issue — right now, it’s President Obama’s turn to be attacked for an increase in gasoline prices that short-term government policies can do little to control.
This is not to say it’s a non-issue. For low-income people, fluctuations in the price of gas, like the price of everything else, can have a major impact on household budgets. This is especially true in areas lacking in transportation options other than cars.
But for all the sturm und drang over, say, a 10-cent-per-gallon price increase at the pump, the impact is relatively minimal. The difference in fueling most cars at that price is less than $2, about the cost of a one-way fare on a city bus.
So why all the outrage?
In an interview on the public radio program Marketplace, Harvard behavioral economist Senhil Mullainathan says there’s a relatively simple explanation: Signs.
While most of us couldn’t correctly identify the price of a tube of toothpaste or a head of lettuce, Mullainathan finds it curious that we can nevertheless recite that morning’s gasoline price, probably to the penny.
People go shopping, we spend on so many things, and we just don’t know. We don’t know the prices of things. But gasoline, even when you’re not buying, it’s staring you in the face. Psychologists call this salience. And the salience of gas prices, I think, makes it such a focal point in the debate.
But apart from getting angry, is there anything we can do about high gasoline prices? Using less of it might be a start, as energy analyst Robert Rapier suggests:
The most sensible thing that governments can do is to encourage a move away from gasoline dependence. In that case, even if prices continue to rise, the economy won’t be as susceptible to the price shock. In fact, when people ask me what they should do to protect themselves against high gas prices, the first thing I ask is “What do you drive?” Do your part to limit gasoline’s hold on your life, and you won’t have to hold your breath that a politician is going to solve this problem for you.
(h/t on Marketplace piece to MPR’s Bob Collins)
Science scarce on eagle, wind farm interactions
An eagle with an injured wing on display at the Minnesota State Fair in 2008. (Photo by Pete Markham via Creative Commons)
Minnesota regulators last week rejected a wind farm developer’s plan for protecting eagles, bats and other wildlife from its turbines as inadequate.
“Inadequate” is also a good way to describe our knowledge of how wind farms actually affect eagle populations.
“There’s just not a lot of good scientific studies that have looked long term at this whole interaction,” says Dr. Julia Ponder, director of the Raptor Center, a renowned large bird rehabilitation center in St. Paul.
The number of reported eagle-turbine collisions is not large, says Ponder. She’s aware of just five cases ever involving bald eagles. An average of 67 golden eagles are killed annually at a single cluster of wind farms in California’s Altamont Pass, but only around 50 golden eagles have been killed anywhere else since the industry began, she says.
To put those numbers in some context, the Raptor Center sees more than 100 eagles per year, more than any other facility of its type. Of the 122 eagles brought to its facility last year, 32 were brought in for lead poisoning (only three survived). The majority were there for some type of unknown trauma, the specific cause of which is usually impossible to pinpoint.
The types of injuries the Raptor Center sees suggest that hunting (lead poisoning), farming (pesticide poisoning), and driving (hit by cars) pose greater risks to eagles than wind turbines.
Comparing these risks is difficult, though, because there is no central database of eagle mortality causes. The Raptor Centers’ own numbers are biased because they only see birds that people find and bring in, skewing the sample towards those that are injured in cities or along roadsides.
It’s unclear whether the small number of reported eagle-turbine collisions is actually reflective of the true number, says Ponder. And it’s unknown why collisions numbers are higher for golden eagles than bald eagles, though Ponder suspects it has to do with the geographic location of existing wind farms overlapping more with golden eagle habitat than bald eagle territory.
How many eagle-turbine collisions occur might not even be the right question to ask, says Ponder. She points to a 2010 study of white-tailed eagles near a 68-turbine wind farm on the island of Smøla in western Norway, which showed the number of nesting pairs within 500 meters of the wind farm fell from 13 before construction to only five pairs a few years later.
“It appears that some of them just said, ‘OK, we don’t want to breed here anymore,’” says Ponder.
As a scientist, though, Ponder says what’s most concerning to her is that developers, policymakers and others are making decisions about the issue without the benefit of research.
“At this point I would say that the data is not being collected,” says Ponder, “and therefore the decisions are being made, as they often are, for reasons other than scientific validity.”
Renewables cheaper than coal, Michigan regulators say
Photo by University of Michigan via Creative Commons
The CEO of a wind manufacturing company says renewable energy is a good investment. That’s to be expected.
But what about the Michigan Public Service Commission (PSC), which regulates major utilities that get most of their power from coal?
The PSC has released its annual checkup [PDF] on the implementation of the state’s Renewable Energy Standard and its cost effectiveness. The highlights include:
- More than $100 million in investments on advanced energy projects from 2008-2011, with job creation as an additional benefit;
- An average cost for renewables of $91.19 per megawatt hour, compared to $133 per megawatt hour for a new coal plant.
That’s almost 42 bucks less per megawatt hour for cleaner energy sources like wind and solar, without nasty downsides like respiratory illness and mercury pollution.
Without much fanfare
This news on the economic upsides of renewables comes from the Energy Innovation Business Council, a trade organization of Michigan clean energy companies. The council is singing the praises of the PSC report. The PSC posted the 53-page document to its website last week, without much of any fanfare.
“Michigan manufacturers and businesses see firsthand how a renewable energy standard drives economic growth, innovation, investments and job creation, and this report validates the need for a strong renewable energy standard,” said Jeff Metts, the CEO mentioned earlier, who runs Astraeus Wind, a manufacturing company based in Eaton Rapids.
“Other states are aggressively pursuing strategies to grow their renewable energy and manufacturing sectors. Michigan must roll up our sleeves and aggressively position ourselves to compete for new opportunities and jobs, or get left behind.”
That last line includes a little politicking. Michigan is on track to meet its RES of 10 percent by 2015, according to the PSC report. Consumers Energy has even lowered its monthly renewable energy surcharge.
However, there’s still a long way to go. Michigan gets only about 3.6 percent of its electricity from renewables. And once the 10 percent by 2015 standard is met, Michigan will still be behind other states with higher standards, including Ohio, Illinois and Minnesota.
The PSC report concludes:
“The Commission is confident that Michigan has the potential to become a regional leader in development and manufacturing of renewable energy systems, building on the state’s engineering expertise, modernized machining, and investment in renewable energy in coming years.
“It appears that the Michigan incentive REC provision in the standard is meeting its intended purpose to encourage developers to maximize the amount of Michigan equipment and labor.”
Sorry, Newt: You can put a gun rack on a bicycle, too
If you were anywhere near the Internet yesterday, you no doubt saw the video of the Georgia man who proved Newt Gingrich wrong by installing a gun rack in his Chevy Volt.
But Fresh Energy colleague (and transportation advocate) Ethan Fawley said via Twitter last night that he was more annoyed by Gingrich’s comment on bicycling.
If you read all the way to the end of the Hill article we posted yesterday, you saw that Gingrich followed his Volt zinger with “It just drives the liberals crazy – how dare we go out and drive vehicles bigger than their bicycles?”
The comment, Fawley says, casts bicycling as “part of some made-up culture war that shouldn’t exist.”
Indeed, most cyclists that I know (myself included) use multiple modes of transportation, including owning and driving automobiles.
And while Gingrich didn’t specifically address the gun-toting utility of bicycles, he will be no doubt pleased to know that innovative American cyclists have figured out ways to bring their beloved firearms along for the ride.
In a 2008 post on the cycling blog Cyclelicious, Yokota Fritz writes about a Cleveland man who has outfitted his bike with a gun rack:
The bike owner’s son wrote to Fritz:
It’s a pretty simple rack using two wood mounts and some elastic to hold it in place. He is not a hard core gun nut or anything crazy like that, just a practical person trying to protect his garden, farm, and beehives from critters.
Elitist!
At the time, Fritz wrote, you could even buy a commercially-made bike gun rack from a company in Texas, which sadly appears to no longer be available:
Then there’s this guy, who owns both a bike and a pickup truck, but uses the former for turkey hunting:
Or, if you’re a bit more bold, you could follow the example of this cyclist from Washington state who found a way to combine non-motorized transportation with his love of assault rifles:
Note which way the business end of the weapon is pointing. Always remember to leave three feet of space when passing a bicycle.
Energy efficiency: Where to begin?
Like most homeowners, I want to lower my energy bills. And I don’t suspect I’m atypical in not knowing exactly where to begin.
When we bought our house just outside St. Paul, a smallish place built in 1922, the first place I looked was the windows – the original, drafty, clunky old wooden windows. I gathered estimates – as high as $14,000 – to outfit the entire home with new, vinyl high-efficiency windows.
The high cost, not surprisingly, relegated that project to the back burner, and, as is the custom in these parts, I simply seal the windows shut with removable caulk and plastic film every winter.
So now what. Insulate the walls? Replace the doors? Commission Christo to wrap the whole place in fabric?
Come to think of it, how do I really know whether the house is inefficient at all?
A few weeks ago, I decided to eliminate the guesswork and have an energy audit performed. My utility, Xcel Energy, has a program that splits the cost, so a full analysis, including infrared scans, can be done at a cost of only $100 to the homeowner (there are lower-frills options available for less money). The auditor provides a report with specific recommendations, as well as information on additional rebates from Xcel to complete the repairs. Many utilities in other areas have similar programs.
For starters, we learned that our house is pretty average in terms of energy use. But we still have some work to do.
The audit helped pinpont a few specifics – for instance, the infrared scans revealed that some of the loose-fill insulation had migrated partway down the angled ceiling on the second floor. The picture below shows a section of ceiling in an upstairs bedroom (the dark areas are colder, the temperature reading is the surface temperature where the bullseye is pointing).
Also, part of the wall on the first floor was insulated during a kitchen remodel, and odder still was this strange section of wall that seemed partially filled with something – we’re guessing vermiculite, which contains asbestos. That’s a handy thing for a contractor to know before they start punching holes in the place.
As an experiment, I had the auditor point the infrared gun at three different windows in the house – two of the original wood windows, one with plastic on it and one without; and a newer vinyl window in the kitchen. Interestingly, all three windows showed the exact same temperature, showing little difference in their insulating qualities (although, the vinyl window deserves a handicap since it’s on the north side of the house). What really matters is how tightly sealed they are, and it seems the caulking gun is the most effective weapon in that fight.
So now, we’ve got a good sense of where to deploy our money. For around $3,500, we can add insulation to the roof and walls, along with caulking and insulating around the foundation, with a payback period of around 5 years. Xcel even maintains a list of recommended contractors to do the work.
Knowledge, they say, is power. And it’ll make it a lot easier to learn to love regard fondly put up with those old wooden windows for a few more years.
Want to save PACE financing? Here’s your chance
Photo by Cayusa via Creative Commons
This is the kind of wonky stuff you could ignore, but shouldn’t, if you’d prefer to power your home with cleaner sources of energy.
PACE, which stands for Property Assessed Clean Energy, allowed local and state governments to loan funds to homeowners for renewable energy and efficiency improvements, and pay the loans back over time via an assessment on their property taxes.
That means the cost of the investment stays with the property, rather than the owner, making improvements with long payback periods more financially attractive.
Twenty-seven states adopted the program, including Minnesota, Michigan, Missouri, Ohio, Illinois and Wisconsin. But following the Fannie and Freddie sub-prime mortgage crisis and a related federal order not to underwrite mortgages for homes with PACE loans, many residential PACE programs were put on hold. So much for that.
But a federal court ruling in California has revived the discussion, according to Forbes.com.
The Federal Housing Finance Agency, the same folks who issued the order in 2010, have been told by a court to initiate a rulemaking process on PACE financing.
Public input needed
An advocacy group called PACE NOW is encouraging people to voice support for the program.
The bottom line, says the group: “PACE programs can drive energy projects that result in significant economic activity, federal, state and local tax revenue and jobs.” They point to examples like a PACE program in Boulder County, Colorado, which created more than 120 jobs, generated $20 million in overall economic activity and cut consumer energy use by more than $125,000 in its first year.
A national study commissioned by PACE NOW also concluded that $1 million spent on PACE improvements in four U.S. cities would generate $10 million in gross economic activity, a total of $1 million in federal, state and local tax revenue, and 60 jobs.
The four cities used in the study (by ECONorthwest) included Columbus, Ohio; along with Long Island, N.Y.; Santa Barbara, Calif.; and San Antonio, Texas.
People who want to see PACE resurrected can submit comments through March 26.
Coal’s changing economics trigger new view of future
The Laskin Energy Center in Hoyt Lakes, Minnesota (Photo by Joel Dinda via Creative Commons)
We’ve long known about the hidden health and environmental costs associated with burning coal, but until very recently, no one questioned that it was a cheap source of electricity for utility customers.
Today, the economics of coal are changing.
The nation’s aging coal-burning power plant fleet faces rising repair and maintenance costs, looming environmental regulations, and increasing competition from cleaner energy sources. For the first time in history, scenarios are emerging in which coal can no longer be assumed the most cost-effective option for utility ratepayers.
In Minnesota, that shift has recently prompted a new reporting requirement for the state’s investor-owned utilities.
Every couple of years, those utilities are required to file something called an integrated resource plan. It’s a document that describes the utility’s forecast for how much electricity it expects to have to generate during the next 15 years, as well as its plan for how it intends to reliably and affordably provide that power to customers. The state’s Public Utility Commission needs to approve the plans.
Minnesota Power, a public utility with 144,000 customers in central and northeastern Minnesota, filed its most recent resource plan in 2009. The company continues to decrease its reliance on coal, which accounted for 95 percent of generation in 2005 and will be reduced to 75 percent in 2013 thanks to recent wind farm investments.
However, during the resource plan’s public comment period, two separate interveners submitted modeling studies showing that Minnesota Power could potentially reduce costs to its ratepayers by shutting down two of its older and smaller coal-burning power plants, the 75-megawatt Taconite Harbor and 110-megawatt Laskin Energy Center.
The studies were filed by the Minnesota Department of Commerce and the Minnesota Center for Environmental Advocacy (MCEA), a member of RE-AMP, which also publishes Midwest Energy News.
“If you took [the small coal-fired power plants] out of the Minnesota Power system and allowed them to disappear, to be retired, the cost to their customers of providing energy over the next 15 years would be lower without these power plants,” said Beth Goodpaster, an attorney who directs MCEA’s clean energy program.
However, the coal-shutdown scenario wasn’t considered in Minnesota Power’s most recent resource plan. The utilities commission asked the utility to follow up with its own analysis of what would happen to rates and reliability if it were to close the power plants. That report, called a baseload diversification study, was completed earlier this month. Its conclusion doesn’t contradict the concerns raised by the state and environmentalists.
Minnesota Power’s report says that under “stringent” environmental regulation scenarios, the added capital investment required to keep its small coal-fired units in compliance would be great enough that replacing them with natural gas generation would be lower cost for customers. Even under a less stringent regulatory scenario, Taconite Harbor may not be cost-effective after 2020.
Among the new and pending rules that are expected to add costs for older coal plants are the Cross State Air Pollution Rule (CSAPR), the National Ambient Air Quality Standards (NAAQS), and the Mercury and Air Toxics Standards (MATS) Rule.
Not a ‘snap decision’
The question now is, what happens next?
A public comment period is open on the baseload diversification study until May, after which the state’s utility commission will decide the next step.
MCEA wants the utilities commission to take action sooner than later to begin phasing out the plants. Minnesota Power, though, says it’s focused on incorporating the information into its next resource plan, due in summer 2013.
“There are certain groups or certain stakeholders that may have expected different things out of this study,” said Minnesota Power spokeswoman Amy Rutledge. “It was never intended that the study would come out and that we would make some kind of snap decision whether or not to keep a coal plant open. There is a lot of information here that we are going to have to look deeper at.”
The key uncertainties lie in how stringent pending pollution regulations will be written, as well as the timing and scope of federal carbon legislation. As those policies and regulations take form, the details will determine whether these smaller, older coal plants can compete economically with newer, cleaner energy sources.
Meanwhile, Minnesota’s utility commission has requested similar baseload diversification studies from Otter Tail Power and Interstate Power & Light.
The studies mark a shift in the way the way regulators and others evaluate utility portfolios. Even a decade ago, no one would have argued coal wasn’t in ratepayers’ best economic interest.
“What we would argue in a case at the public utilities commission in the ’90s or even early ’00s is that you ought to take opportunities to reduce carbon dioxide emissions because it’s better for the planet, but we didn’t try to say that it’s also cheaper if you do this,” Goodpaster said.
Minnesota Power says its study doesn’t consider the socioeconomic impact of shutting down its smaller coal plants, which are located in Schroeder, Minn., and Hoyt Lakes, Minn.
“These decisions are decisions that have great impact,” Rutledge said, “and it’s not a decision that we would make lightly.”
Streetcar revival: Coming soon to a city near you?
The streetcar system in Portland, Oregon, has been credited with sparking more than $3.5 billion in new residential and commercial development. (Photo by TriMet via Creative Commons)
Forget the bus and the skip the train, the future of American urban transit could be the old-fashioned streetcar.
Signs of what U.S. Transportation Secretary Ray LaHood has called a “streetcar revival” are popping up all over the country.
In St. Paul, officials are embarking on a yearlong, $250,000 study of potential streetcar routes, following the lead of neighboring Minneapolis, which has spent over $1 million studying two possible streetcar corridors.
The Twin Cities are among more than 80 U.S. cities – including Detroit and St. Louis – that are looking into street cars, according to the American Public Transportation Association.
And several cities have been building or expanding their systems over the last decade, including Atlanta, Portland, Ore., Seattle, Washington D.C. and New Orleans – a city that boasts the oldest continuously operating streetcar in the world.
The turn to streetcars is being led not just by nostalgia and the needs of an increasingly urban populous, but by a broader desire to spark economic activity, Governing reports.
“When Portland built its line in 2001, the city hoped it would encourage transit-oriented development,” Governing reported. “The line has done just that. Today, it is credited with leading to $3.5 billion in new construction, 10,000 residential units, and more than 5 million square feet of office and hotel space.”
A recent study of the Washington D.C. system also suggested that streetcars induced development, boosted property values and brought people closer to mass transit – factors that created as much as $291 million in new tax revenue for the city.
Such economic considerations are a relatively new factor in deciding how federal transportation dollars are spent.
In 2010, the Obama administration opted to add economic development potential and social benefits to the list of factors to be considered when deciding which transportation projects to support.
Since then, the DOT has provided nearly $350 million in funding for 11 streetcar and urban circulator projects across the country.
The resurgence in activity comes 50 years after streetcars nearly disappeared from the American landscape as automobiles crowded the streets and mass transportation gave way to buses.
But proponents tout them as more than just history-evoking tourism gimmicks. Besides the potential economic ripple effect, proponents say streetcars offer more universal accessibility and suggest their ability to attract urban dwellers reduces the need for car travel, cutting carbon emissions.
A 2010 study of a proposed $128 million system with seven streetcars and five miles of tracks in Cincinnati suggested the project could reduce vehicle miles traveled by over 1.2 million in its first year, saving more than 74,000 gallons of gasoline. The study also suggested the streetcar could eliminate nearly 14,000 tons of carbon emissions over 20 years
Not every streetcar project has been a boon, however. Tampa, Fla. officials received a report this week suggesting their streetcar system – supported through special assessments, ridership fees and an endowment – was plagued by financial mismanagement and hefty insurance costs.
Randal O’Toole, a senior fellow with the Cato Institute and the author of Gridlock: Why We’re Stuck in Traffic and What to Do About It, also panned the promise of streetcars in a recent commentary in the Atlanta Journal Constitution.
O’Toole, a proponent of buses, described streetcars as an “obsolete technology” that require more energy than cars and have a specious economic development record supported primarily by public subsidies.
“There is a good reason why all but six of the more than 800 American cities that once had streetcars replaced them with buses: Streetcar infrastructure is expensive to build, expensive to maintain and must be rehabilitated at high cost about every 30 years,” he wrote.
LaHood, though, doesn’t seem to be backing down. After attending a streetcar conference in Portland earlier this month, he continued to promote the promise of streetcars on his blog, writing that their revival “means greater mobility and more American jobs.”
Study: Minnesotans willing to pay premium for E85
(Photo via USDA)
Minnesota drivers like their E85, and they’re willing to pay a premium for it.
A new study by a Michigan State University economist shows that even when the higher ethanol blend is a more expensive option than regular gasoline, some flex-fuel vehicle owners in Minnesota continue buying the higher-blend ethanol.
E85, which contains a mix of 85 percent ethanol and 15 percent gasoline, is almost always less expensive per gallon than regular gasoline, which in Minnesota typically contains 10 percent ethanol. But because of E85′s lower energy content, the relative cost per mile of using it can vary.
Soren Anderson, an assistant professor of economics, examined sales and price data from 200 Minnesota fueling stations between 1997 and 2006.
“When the price of E85 rose relative to gasoline, the market didn’t disappear,” Anderson said. “There were still people buying E85 even when its price was quite a bit higher [relative to] gasoline.”
Anderson argues that researchers should take this consumer preference into consideration when calculating the cost of policies such as the federal renewable fuels standard.
Several studies have examined how drivers respond to changes in gasoline prices, but little was known about how ethanol blend prices affect consumer decisions. Anderson concluded that a 10-cent-per-gallon increase in E85 prices caused demand to fall off between 12 percent and 16 percent. That’s significant, but smaller he would have guessed knowing that drivers could have easily switched to conventional gasoline.
“They value something about that fuel when they’re willing to buy it even when the per-fuel-mile price is high,” Anderson said.
The study didn’t survey drivers about their motivations, but it says possible explanations include perceived social and environmental advantages, or misunderstanding about how the fuels compare.
Sales of E85 ethanol have continued to grow in Minnesota, according to statistics publicized this week by the American Lung Association in Minnesota.
Minnesotans bought an estimated 19.8 million gallons of E85 in 2011, making it the third best year for E85 and best since the pre-recession record of 22.5 million gallons in 2008. Gasoline sales, meanwhile, fell to 2.4 billion gallons in 2011 from 2.5 billion gallons in 2010.
“I think it’s a sign that E85 has really become well established in Minnesota,” said Bob Moffitt, spokesman for the American Lung Association of the Upper Midwest. “It’s got a really solid base of customers. The number of stations is not growing quite so fast as it was in the earlier years, but we’re steadily adding numbers.”
Moffitt takes issue with the second part of Anderson’s study, which concludes that even accounting for the “sizable” premium some drivers are willing to pay for ethanol, the federal renewable fuel standard is an expensive way to reduce greenhouse emissions — about $70 per metric ton of carbon dioxide emissions avoided, Anderson calculated.
Anderson acknowledges in his report that the carbon cost is based on current assumptions about the price of ethanol and gasoline, either of which could change due to political, economic or technology factors, such as a game-changing breakthrough in cellulosic ethanol production. If greenhouse emission reductions is the goal, Anderson said in an interview that a more direct policy such as a carbon tax would be less costly to consumers.
The federal renewable fuel standard will require 36 billion gallons of annual production by 2022, with no more than 15 billion gallons coming from corn-based ethanol. Many of the assumptions Anderson makes about its cost come directly from the U.S. Environmental Protection Agency’s regulatory impact statement for the policy.
Moffitt said one of Anderson’s assumptions — that E85 ethanol nets 36 percent fewer miles per gallon than conventional gasoline — is not what they’ve observed and heard from drivers. In real life it’s closer to a 15 percent or 20 percent decrease, Moffitt said.
Ethanol offers benefits beyond reducing greenhouse gases, too, Moffitt said. Anderson’s study focuses solely on greenhouse gases and consumer impacts. The EPA’s policy impact report counts $2.6 billion worth of energy security benefits, up to $2.2 billion in health benefits, and $13 billion in new farm income. (Also: millions of pounds of new nitrogen and phosphorus pollution in the Mississippi River.)
“Gasoline powered vehicles produce a lot more than just greenhouse gas. They’re the single largest source of air pollution in Minnesota,” Moffitt said. “Any steps we can take toward cleaner, more renewable fuels is a step in the right direction.”
On that point, it would seem many Minnesota drivers agree.
