State Department Cooperation in Hemispheric Alternative Energy: Lessons

1. State Department Cooperation in Hemispheric Alternative Energy: Lessons by: Matthew McManus Division Chief, Energy Producer Country Affairs U.S. Department of State

2. Overview • Why Biofuels are Strategic • U.S. Domestic Initiatives • U.S. & International Cooperation • Case Study: Biofuels in the Dominican Republic • Sugar vs. Fuel Ethanol: • a case for both

3. Strategic Value of Biofuels • Biofuels are renewable & can be sustainably developed • Biofuels have a lower carbon footprint than conventional fossil fuels • Final EPA Rulemaking quantifies the reduced environmental impact of key biofuels, including lower lifecycle GHG – sugarcane ethanol by up to 61%, corn around 20%. • Greater than 40 percent reduction in most tailpipe emissions. • Biofuels can be cultivated using proven agricultural methods on existing land • Biofuels Increase American Energy Security, Economy • U.S. largest oil user, at 18 mmbd; oil use trending down sharply, down 2 mmbd in two yrs. China growing, now consumes about half as much as U.S. does. • U.S. is world’s largest oil importer, but 40% CAFÉ increase/biofuels reducing demand. • Biofuels now represent nearly 10 percent of US Gasoline supplies; EPA reviewing increase to 15 % blending. • Equal to our fourth largest “foreign” supplier… • Balance of payments, trade, economic benefits for USA • Biofuels: global implications • Best practices are being shared among interested countries and regions

4. U.S. Domestic Renewable Energy EffortsAmerican Recovery & Reinvestment Act (ARRA) • Enacted in February 2009 • $36.7B in Energy and Efficiency Funding • R&D, Commercialization of Renewable Energy & Research • $4B Loan Guarantees for Renewable Energy • $0.4B Advanced Research Projects- Energy http://www.DOE.gov ARRA Funding Projects

5. U.S. Investments into Renewable EnergyDOE Allocation of (ARRA) Renewable Energy Funds • Energy Efficiency Projects (up to $17B) • Geothermal ($350MM with equal matching) • Solar and Wind ($500MM) • Fuel Cells & Hydrogen ($400MM) • Biofuels Projects • Algae and Advanced Biofuels (up to $85MM) • Cellulosic/Biorefineries (more than $600MM) • Hydroelectric • Infrastructure • Smartgrid • Tidal http://www.DOE.gov ARRA Funding Projects

6. U.S. Biomass by Region www.NREL.gov , Domestic Biomass Locations

7. International Cooperation on Biofuels • Brazil-US MOU to Advance Cooperation on Biofuels • Joint Development on R&D of Next Generation • Harmonize Standards to permit expansion of Global Biofuel Market • Assisting 3rd countries in CenAm/Caribbean w/ Biofuels • Dominican Republic, El Salvador, Guatemala, Haiti, Jamaica. • Most oil dependent region in world – imported oil for maritime, aviation, road and electric power needs. • Goal is to substitute locally grown commodity for imported one, starting with E10 blending. • Jamaica introduced E10 blends this year; DR pending and ES legislating. • U.S/OAS Feasibility Studies and Technical Assistance. Brazilian, Vargas Foundation, Agronomy Studies.

8. A sample of ethanol blending around the world These charts are unofficial and based on second hand sources, and are intended merely to show directional adoption of ethanol fuels. Additionally, many other countries have legislation or policy work pending to address adoption of some blends of biofuels

9. Biofuels in the Dominican Republic The Dominican Republic has an opportunity to implement an effective domestic biofuels campaign • POLICY: • Renewable Energy Law, Law 57-07 (2007) Introduces ethanol for motor fuel • DIVERSIFICATION OF ENERGY SUPPLIES: • Opportunity to improve energy security with some domestic production • Opportunity to introduce clean energy into the domestic energy matrix • ECONOMIC GROWTH: • Potential to add jobs & generate additional revenues • AGRICULTURAL EXPERTISE & POTENTIAL: • As a regional leader in sugar, the Dominican Republic has tremendous experience and skill in a strategic crop • There exists the potential to make use of un-used or fallow land • REGIONAL LEADERSHIP: • Can leverage support of Brazil and U.S. to be a Caribbean leader in domestic biofuels use.

10. Utilizing Sugarcane to produce Sugar AND Ethanol • Permits increased market flexibility by diversification • Permits a more robust energy strategy • Capitalizes on available land and regional expertise • Benefits from international expertise and cooperation A responsible and calculated diversification of cane production to serve both the food and energy markets could be advantageous to the Dominican Republic

11. Room enough for BothSugar and Ethanol • A break-point line concept helps identify when conditions are economically favorable for a given end-use • Market conditions will change constantly, but both sugar and fuel ethanol will maintain strong support

12. Room enough for BothSugar and Ethanol • A horizontal break-point line concept helps identify when conditions are economically favorable for a given end-use • Market conditions will change constantly, but both sugar and fuel ethanol will maintain strong support

13. Conclusions • Biofuels have national security, energy security, balance of trade and economic benefits to the U.S. • Amidst declines in U.S. crude oil use, growing auto efficiency and biofuels use reduces our foreign oil dependence • EPA has reviewed lifecycle GHG emissions. • DOE is working to promote next generation and advanced biofuels. • State is working with Brazil to advance global uptake of biofuels, and to partner with oil dependent countries to assist them to produce biofuels for their domestic market.

14. Thank you!