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The Nexus of Energy, Environment and the Economy WIN, WIN, WIN

The Nexus of Energy, Environment and the Economy WIN, WIN, WIN. International Board of Direction ITE Oct 31, 2008 Alan E. Pisarski. The Starting Point. Three Interacting Factors Energy Security GCC/GHG Economic Activity

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The Nexus of Energy, Environment and the Economy WIN, WIN, WIN

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  1. The Nexus of Energy, Environment and the EconomyWIN, WIN, WIN International Board of Direction ITE Oct 31, 2008 Alan E. Pisarski

  2. The Starting Point • Three Interacting Factors • Energy Security • GCC/GHG • Economic Activity • Look For Win / Win / Win – They Do Exist: • Vehicle Fuel Efficiencies • Stationary Fuel Efficiencies • Fuel Shifts

  3. THE FACTUAL BASE

  4. U.S. Greenhouse Gas Emissions 4 4

  5. U. S. Transportation Carbon Emissions by Mode, 2003 (Million metric tons CO2) Pipeline/Other, 47 Internat'l./Bunker, 84 Waterborne, 58 Rail, 43 Air, 171 Light Vehicles, 1113 Heavy Vehicles, 350 Surface Transportation is the main issue for now

  6. Petroleum – high in energy/pound

  7. Energy Intensity • Btu per $ of GDP declines about a third from 2006 to 2030 (-2%/yr since 1992) • Decline of energy intensive industries • Energy Efficiency • 1990 – 2006 Pop 20%; Energy 18% • 2006 – 2030 Pop 22%; Energy 19% 1980=1.0

  8. Annual Energy Outlook – DOE 2008 background forecasts Q = quadrillion Btu = 172 million bbls oil/yr EISA = Energy Independence and Security Act 2007 MMT = million metric tons Mbbls = million barrels

  9. AEO 2008 Transportationforecast changes from pre EISA

  10. Transportation now leads in energy consumption(q Btu)

  11. THE TRENDS ARE LARGELY POSITIVE • CO2 Is Almost Self-stabilizing • Energy Intensity/GDP Declining • Energy Intensity/Capita Stable • Transportation VMT Slow Growth • Vehicle Fuel Efficiency • Demography • Price Will Be Key Factor

  12. 4$ a gallon has come and gone • Will it be back? When? • Who is affected? • What happened to vmt? • What happened to commuting? • Are there answers: • Short Term ? • Long Term ?

  13. VMT DECLINE STARTED HERE! COST OR STICKER SHOCK?

  14. % Decline in VMT by Month 2008-2007

  15. % Decline in VMT by Month 2008-2007

  16. % Decline in VMT by Month 2008-2007 July - 3.6% Aug. - 5.6%

  17. HURRAY! Schadenfreude! Those suburbanites had it coming! At last we are at “the Tipping Point” Now there will be a rush to the center for people and jobs BOO ! Less VMT = trips not taken; less economic activity Now is the worst time to be cutting economic activity TWO REACTIONS

  18. VMT trend is not just gas prices • WEAK ECONOMY • Discretionary trips in Vacation Season • DEMOGRAPHY - a long term trend

  19. TREND IN PERSONAL VMT – by age-sex Source: Commuting in America III

  20. END OF THE BOOM 1980-90 • 18.5 Million 1990-2000 • 13.3 Million 2000-2010 • Maybe as many • Our problem may be too few commuters not too many! Source: Commuting in America III

  21. A little Perspective Here!How much are we really talking about? 3.3% drop for year = • Last year I drove 300 miles a week [15,000 miles/yr] • This year I drove 290 miles a week = 1 five mile trip lost per week

  22. IS FUEL CHEAP AT 4$? PLUS WE ARE 20% RICHER THAN THEN!

  23. TRIP CHAINING– Big payoffs CARPOOLING Work – some gains Non-work – more CUTS IN TRIP LENGTH CUTS IN TRIPS MADE SHIFTS TO TRANSIT? Maybe 2% FREIGHT Local Distribution opportunities Load changes Big Fleet gains VMT Response: Where did it go?

  24. Would 5$ or 6$ gas change America? • LIFE STYLE PREFERENCES WILL DETERMINE GOALS; AND TECHNOLOGY WILL RESPOND • The consumer benefit of automobility is colossal – think of toll costs = $4/gal • Europe at $9/gal; still has traffic jams • SERIOUS EFFECTS • slower access to automobility of minorities and lower income populations • Rural stress • Less access to broader worker pool • Depresses auto sales • FLEET TURNOVER RATE WILL BE KEY

  25. STATE OF THE PRACTICE

  26. GOOD WORK BEING DONE • Many (maybe too many!) players • Here and abroad • Technologies • National Modeling DOE; NCEP, EPA • Metropolitan Modeling Wash COG, others? • Policy • NCEP • US CHAMBER

  27. Key Studies • OUTSIDE US • Eddington – link between Transport and Economy • Stern – Economic Review of Climate change • King – review of low carbon car opportunities • UK Dept for Transport – attempts to meld all • INSIDE US • McKinsey – assess opportunities and costs • NCEP – assess impacts of policies • Institute for 21st Century Energy US C of C made recommendations for energy security • Energy Security Leadership Council

  28. GHG responses are different from Air Quality Approaches • Reducing GHG and fuel use works with self interest • Immediate cost savings • Maybe some trade-offs • Greater appreciation of role of technology • Short term/long term factor is more significant • Low cost • Immediate action • Present value analysis

  29. What Part Of Gains In Air Quality In The Past 20 Years Have Come From: Technology? Changed Behavior? A Question!

  30. What Part Of Gains In Air Quality In The Past 20 Years Have Come From: Technology – 95% to 105% Changed Behavior +5% to -5% A Question!

  31. What Part Of Gains In Air Quality In The Past 20 Years Have Come From: Technology 95% to 105% Changed Behavior +5% to -5% What Part Of Gains In Green House Gases In The Next 20 Years Will Come From: Technology? Changed Behavior? A Question!

  32. EPA approach as model • Change behavior or change technology? • GHG is even more true • No conflicts over trade offs re costs or bens • AQ increased costs for unclear bens • Safety was key tradeoff issue • GHG is reduced costs and maintain bens • McKinsey Study Consumer Surplus

  33. 4 PARTS TO REVIEW PROCESS • EMISSIONS NOT VMT • AVOID THE CONFORMITY PROCESS • STAY OUT OF NEPA – PROJECT BASED • PROCESS IS “BROKEN” • PROJECT, HOTSPOTS & METRO BASED • GHG IS GLOBAL • FOCUS ON COST-EFFECTIVENESS

  34. SHORT TERM Speed – Eco-driving Congestion Operations Trip Chaining Work at Home Work Schedules Fleet Optimization Carpooling Load Factors Non-Motorized Means LONG TERM New Facilities New Vehicles Fleets Public/Private Private Individual New Technologies New Fuels Land Use Changes Redistributed O-D’s EARLY TIMING IS A MAJOR FACTOR STUFF STAYS AROUND A LONG TIMEM Norman

  35. Time Focus is Different • GHG is cumulative; therefore early solutions are superior to longer term • A form of present worth analysis is appropriate • In some ways opposite to air quality • Need to focus: • Near term 1-5 years • Mid-term 5-20 years • Long-Term 20 + years

  36. Near term • Attack current congestion • Focus on operations, speeds, flow • Non-construction-based mode shifts • Carpooling, trip chaining, use current transit, work at home, non-motorized opportunities • Construction and Reconstruction are potential negatives to be recognized in b/c analysis • Refocus research and planning • more efficient mechanisms for construction and maint. (concrete, steel, construction machinery, etc.)

  37. Mid-term • Critical Transportation Factors • Vehicle power trends • Sources of electricity • Travel demand PMT/VMT demographic trends • Outside scope of profession? • Scale of energy-intensive industries • Efficiency gains in other sectors • Restructuring of energy distribution

  38. Long Term • Life Styles • Energy intensive vs non-intensive industries • Wealth-producing productivity • Efficiencies in other sectors • Substitutes for mobile fuels • Ultimately it’s all about electricity

  39. POLICY ISSUES AND EXPECTATIONS

  40. Emphasis on System Operations • The 4-legged stool is now a standard item in transportation GHG topic • System Ops is now the fourth leg

  41. EMPHASIS ON OPERATIONS NO REGRETS – NO DOWNSIDES

  42. Emphasis on flow and speed control CO2 reductions can be accomplished by reducing congestion and improving operational efficiency Source: University of California, Riverside

  43. STATE GHG ASSERTIONS • 60-80% cut in GHG below 1990 by 2050 • Too many are just Political assertions of aspirations; without substance • Transportation leadership “not involved” “There is stunning degree of innumeracy when it comes to the numbers surrounding climate change legislation. " Statement by outgoing Chairman of President’s Council on Environmental Quality”

  44. STATE GHG ASSERTIONS • TRIUMPH OF RHETORIC OVER REALITY: “The legislation expresses the sentiments the Congress would like to have us believe they hold!” George Will

  45. LAND USE OPTIONS • Very long term • Limited opportunities – (population doubling rate) • Scale responses small • Density is one of the key life style choices • Inconsistent with affluent, technologically developed society • Options and opportunities – not requirements • Let it happen – not make it happen

  46. LAND USE OPTIONS • There is a colossal existing potential for people to live “more efficient” life-styles if they choose. We can go to the nearest: Job School Food store Restaurant Doctor Religious Facility

  47. ULI on Land Use Potential • “It is realistic to assume a 30 percent cut in VMT with compact development.” • “… smart growth could …reduce total transportation-related CO2 emissions from current trends by 7 to 10 percent as of 2050.” • Assumes: • 67% of development in place in 2050 is new or rehab • 60-90% of that development is “smart growth” (equivalent to 15 housing units per acre) [= 25,000 sq. mi.] -- “Growing Cooler” by ULI, CCAP, et al, 2007

  48. EFFICIENCY VS EQUITY • The Efficiency/Equity argument is fundamental to any regulatory process • EQUITY = your share of solution should equal your share of the problem! • EFFICIENCY = do most cost-effective first and solve more of the problem per $

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