Natural Gas and Transportation Fuels Boise, Idaho September 7, 2006 353 Sacramento Street, Suite 1700 San Francisco, CA 94111 Telephone: (415) 391-5100

Natural Gas and Natural Gas and Transportation Transportation

FuelsFuels

Boise, IdahoBoise, Idaho

September 7, 2006September 7, 2006353 Sacramento Street, Suite 1700

San Francisco, CA 94111Telephone: (415) 391-5100

http://www.ethree.com

AgendaAgenda

9:309:30 Introduction by Co-Chairs Introduction by Co-Chairs 9:459:45 Clean Air Act and Treasure ValleyClean Air Act and Treasure Valley10:05 10:05 Biofuel Incentives (John Crockett)Biofuel Incentives (John Crockett)10:25 10:25 Transportation Programs (Eric Cutter & Transportation Programs (Eric Cutter &

Hillary Sinnamon)Hillary Sinnamon)10:4510:45 Break Break 11:0011:00 Review results of Conservation Subcommittee Review results of Conservation Subcommittee 11:1511:15 Biofuels Policy Goals Biofuels Policy Goals 12:00 12:00 LunchLunch1:151:15 Petroleum & Transportation Policy GoalsPetroleum & Transportation Policy Goals2:002:00 Natural Gas Policy GoalNatural Gas Policy Goal2:452:45 BreakBreak3:003:00 Wrap UpWrap Up3:30 3:30 AdjournAdjourn

GoalsGoals

Further develop general policy goals Further develop general policy goals from last meetingfrom last meeting

Consensus recommendations on Consensus recommendations on specific policy goals for state energy specific policy goals for state energy planplan

Focus on high level policy goalsFocus on high level policy goals

State State Transportation Transportation

ProgramsPrograms

Clean Cars ProgramClean Cars Program Adopted by 10 states, including WA and Adopted by 10 states, including WA and

OROR 1/31/3rdrd of US car market of US car market

Beginning in 2009 model yearBeginning in 2009 model year 34%/25% reduction in greenhouse gas 34%/25% reduction in greenhouse gas

emissions for cars/light trucks by 2015emissions for cars/light trucks by 2015 Could decrease gasoline consumption by Could decrease gasoline consumption by

7.2 billion gallons annually by 20207.2 billion gallons annually by 2020 Help Idaho meet Federal air quality Help Idaho meet Federal air quality

standardsstandards Automaker lawsuits in several statesAutomaker lawsuits in several states

Oregon Public Oregon Public TransportationTransportation

Oregon Transportation Enhancement Oregon Transportation Enhancement ProgramProgram

Rural Transportation Assistance Rural Transportation Assistance ProgramProgram

Intercity Passenger ProgramIntercity Passenger Program Transportation and Growth Transportation and Growth

Management ProgramManagement Program Pedestrian and bicycle program grantsPedestrian and bicycle program grants Safe routes to schoolsSafe routes to schools

WashingtonWashington

Rural Mobile GrantsRural Mobile Grants Intercity Bus TransportationIntercity Bus Transportation Job Access and Reverse CommuteJob Access and Reverse Commute

Market Market TransformationTransformation

Transforming the MarketTransforming the Market

TransformTransform PopularizePopularize

DevelopDevelop SupportSupport

COST

GENERALTARGETED

INCENTIVES

MANDATESUSE OF 10%

BIOFUEL BLENDS

FLEX/ALT FUEL VEHICLES USING 85%

BLENDS

PLUG IN HYBRIDS

HYBRID/HIGH MPG VEHICLES

Building ConsensusBuilding Consensus



COST

GENERALTARGETED

INCENTIVES

MANDATES

RENEWABLE FUEL

STANDARD

MINIMUM AFV PURCHASE

REQUIREMENT

R&DGRANTS

REBATESTAX

INCENTIVESBOOKENDS

BOOKENDS

BiofuelsBiofuels

Alt. Fuel Alt. Fuel RecommendationsRecommendations

It is in the interest of Idaho to promote the production and use of It is in the interest of Idaho to promote the production and use of alternative fuels, through policies, strategies and actions that are cost-alternative fuels, through policies, strategies and actions that are cost-effective and environmentally sound. In adopting incentives and other effective and environmentally sound. In adopting incentives and other measures to promote alternative fuels the state shall consider the benefits measures to promote alternative fuels the state shall consider the benefits to economic development, security, reliability, environmental protection to economic development, security, reliability, environmental protection and public health. Potential measures may include but are not limited to:and public health. Potential measures may include but are not limited to:

Encouraging state fleet purchases and use of alternative fuel and efficient vehiclesEncouraging state fleet purchases and use of alternative fuel and efficient vehicles Incentives and investment tax credits for Idaho growers and producers of Incentives and investment tax credits for Idaho growers and producers of

alternative fuelsalternative fuels Encourage future development of cellulosic ethanol production in IdahoEncourage future development of cellulosic ethanol production in Idaho Adopting cleaner tailpipe emission standardsAdopting cleaner tailpipe emission standards Incentives for the purchase of FFV and alt. fuel vehiclesIncentives for the purchase of FFV and alt. fuel vehicles Incentives and grants for retail and wholesale alternative fuel supply Incentives and grants for retail and wholesale alternative fuel supply

infrastructureinfrastructure Incentives and tax credits for the sale and purchase of alternative fuelsIncentives and tax credits for the sale and purchase of alternative fuels Promoting research and development and business-university partnerships to Promoting research and development and business-university partnerships to

speed commercialization of alternative fuel technologies.speed commercialization of alternative fuel technologies. Education and promotion campaigns for consumers and regulatorsEducation and promotion campaigns for consumers and regulators

Incentives may include fuel tax deduction or exemptions, tax credits, loans, Incentives may include fuel tax deduction or exemptions, tax credits, loans, loan guarantees, grants, parking and HOV lane privileges, loan guarantees, grants, parking and HOV lane privileges,

Maintain flexibility to adapt to changing and improving technology and Maintain flexibility to adapt to changing and improving technology and adjust to price and supply issues in a maturing market. adjust to price and supply issues in a maturing market.

Biofuel ProposalsBiofuel Proposals1.1. Grants to retailers for biofuels Grants to retailers for biofuels

infrastructureinfrastructure

2.2. Investment tax credit for biofuels Investment tax credit for biofuels infrastructure upstream of retailersinfrastructure upstream of retailers

3.3. Promote culture of conservationPromote culture of conservation

4.4. Countercyclical biofuel producer incentiveCountercyclical biofuel producer incentive

5.5. Flexible fuel vehicle state fleet pilot projectFlexible fuel vehicle state fleet pilot project

6.6. Incentives to use feedstock byproducts Incentives to use feedstock byproducts from biofuel productionfrom biofuel production

7.7. Include synthetic fuels in definition of alternative Include synthetic fuels in definition of alternative fuelsfuels

Production IncentivesProduction Incentives



Rely on existing incentivesRely on existing incentives

Incentives for growersIncentives for growers

Incentives for producersIncentives for producers

Loan guarantees/tax credits for producersLoan guarantees/tax credits for producers

Grants for producersGrants for producers

Business-university Business-university partnershipspartnerships

Renewable fuels development Renewable fuels development programprogramSupport Federal R&D Support Federal R&D effortsefforts

Biofuel DemandBiofuel Demand



Require stations be Require stations be allowed to offer ethanol allowed to offer ethanol blendsblends

Lower fuel tax for biofuelsLower fuel tax for biofuels

Tax incentives for Tax incentives for retail sale of biofuelsretail sale of biofuels

Expedite PermittingExpedite Permitting

Study options for RFSStudy options for RFS

Adopt RFS goalAdopt RFS goal Adopt Mandatory RFS StandardAdopt Mandatory RFS Standard

Adopt alt. fuel Adopt alt. fuel infrastructure requirementinfrastructure requirement

Adopt Alt Fuel Infrastructure GoalAdopt Alt Fuel Infrastructure Goal

Incentives/grants for retail Incentives/grants for retail infrastructureinfrastructure

Support 10 year Support 10 year extension of federal extension of federal biofuel tax creditsbiofuel tax credits

Support 10% federal Support 10% federal agency biofuel purchase agency biofuel purchase requirementrequirement

Public education and Public education and promotion of biofuelspromotion of biofuels

Petroleum & Petroleum & TransportationTransportation

Petroleum Petroleum RecommendationsRecommendations

Promote conservation as primary means Promote conservation as primary means of improving the reliability and cost of of improving the reliability and cost of Idaho’s transportation fuel supply while Idaho’s transportation fuel supply while also encouraging development of new also encouraging development of new resources resources

Support responsible exploration and Support responsible exploration and production of petroleum supply and production of petroleum supply and expansion of transmission, storage and expansion of transmission, storage and distribution infrastructure benefiting distribution infrastructure benefiting IdahoIdaho

Transportation Transportation RecommendationsRecommendations

Work with other states to promote increase in Work with other states to promote increase in Federal CAFE standards Federal CAFE standards

Encourage use and purchase of hybrid, high mileage, Encourage use and purchase of hybrid, high mileage, alternative and flex fuel vehicles. Explore alternative and flex fuel vehicles. Explore opportunities for adoption by private and state owned opportunities for adoption by private and state owned fleets, public transportation and school busses. fleets, public transportation and school busses.

Promoting use and expansion of public transportation Promoting use and expansion of public transportation where effective in reducing vehicle miles traveled, where effective in reducing vehicle miles traveled, including intercity transportation where feasible including intercity transportation where feasible

Promote reduction of truck and tour bus idling Promote reduction of truck and tour bus idling Investigate encouraging use of rail and intermodal Investigate encouraging use of rail and intermodal

freight transportation where feasible freight transportation where feasible

Vehicle Program Vehicle Program CategoriesCategories

By Type By Owner By Niche

• High MPG• Ethanol• Biodiesel• Methanol• Natural Gas• Propane• Hybrid• Electricity• Aftermarket

Conversion

• State Government• Local Government• Fleets• General Public

• Airport Vehicles• School Busses• Transit Bussed• Shuttle Busses• Refuse Haulers• Taxis• Delivery Vehicles• Traffic

Enforcement• Police Vehicles

Alt Fuel/High Efficiency Alt Fuel/High Efficiency VehiclesVehicles



Support efforts to Support efforts to encourage development of encourage development of plug-in hybridplug-in hybrid

Adopt CA Clean Cars Program (OR, WA)Adopt CA Clean Cars Program (OR, WA)

Carpool/State ParkingCarpool/State Parking HOV Lane use (w/ MPG qualifier)HOV Lane use (w/ MPG qualifier)

Min alt fuel vehicles requirementMin alt fuel vehicles requirement

FreebatesFreebates

Min. avg. fuel efficiencyMin. avg. fuel efficiency

Sales Tax ExemptionSales Tax Exemption

Reduced registration feesReduced registration fees

Public TransportationPublic Transportation



Grants, loans, technical Grants, loans, technical assistance to transportation assistance to transportation agenciesagencies

Commuter checksCommuter checksEmployer incentives for carpoolingEmployer incentives for carpooling

HOV LanesHOV Lanes

Grants, loans, technical Grants, loans, technical assistance for intercity assistance for intercity transportationtransportation

Bikes on TransitBikes on Transit

Idle ReductionIdle Reduction



Incentives for installation Incentives for installation of idle reduction technology of idle reduction technology at truck stopsat truck stops

Time Limits for truck Time Limits for truck idlingidling

Time Limits for bus idlingTime Limits for bus idling

Require automatic Require automatic shutdown on new enginesshutdown on new engines

Natural GasNatural Gas

Natural Gas Natural Gas RecommendationsRecommendations

Encourage the highest and best use of natural gas.Encourage the highest and best use of natural gas. Encourage direct end use in applications for which Encourage direct end use in applications for which

natural gas is the most efficient energy source.natural gas is the most efficient energy source. Where appropriate and cost effective encourage use of Where appropriate and cost effective encourage use of

natural gas vehicles for company and/or state owned natural gas vehicles for company and/or state owned fleetsfleets

Support responsible exploration and production of Support responsible exploration and production of natural gas supply and expansion of transmission, natural gas supply and expansion of transmission, storage and distribution infrastructurestorage and distribution infrastructure

Support non traditional natural gas supply resources, Support non traditional natural gas supply resources, including landfill methane, anerobic digesters, biomass including landfill methane, anerobic digesters, biomass methane. methane.

Support siting of LNG terminals in the US as well as and Support siting of LNG terminals in the US as well as and infrastructure that provides delivery capability to Idaho infrastructure that provides delivery capability to Idaho

Direct Use of Natural Direct Use of Natural GasGas



Consumer EducationConsumer Education

Incentives for fuel Incentives for fuel switchingswitching

Ensure PUC and utility Ensure PUC and utility policies encourage efficient policies encourage efficient customer choicecustomer choice

Consider fuel switching as Consider fuel switching as resource in IRPresource in IRP

NGV incentives for state NGV incentives for state and local fleetsand local fleets

Actively support Actively support responsible exploration and responsible exploration and infrastructure infrastructure enhancementsenhancements

Incentives & grants for Incentives & grants for non-traditional methane non-traditional methane sourcessources

Documents

Natural Gas and Transportation Fuels Boise, Idaho September 7, 2006 353 Sacramento Street, Suite 1700 San Francisco, CA 94111 Telephone: (415) 391-5100