Natural Gas and Transportation Fuels

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

2. Agenda 9:30 Introduction by Co-Chairs 9:45 Clean Air Act and Treasure Valley 10:05  Biofuel Incentives (John Crockett) 10:25  Transportation Programs (Eric Cutter & Hillary Sinnamon) 10:45 Break 11:00 Review results of Conservation Subcommittee 11:15 Biofuels Policy Goals 12:00  Lunch 1:15 Petroleum & Transportation Policy Goals 2:00 Natural Gas Policy Goal 2:45 Break 3:00 Wrap Up 3:30 Adjourn

3. Goals • Further develop general policy goals from last meeting • Consensus recommendations on specific policy goals for state energy plan • Focus on high level policy goals

4. State Transportation Programs

5. Clean Cars Program • Adopted by 10 states, including WA and OR • 1/3rd of US car market • Beginning in 2009 model year • 34%/25% reduction in greenhouse gas emissions for cars/light trucks by 2015 • Could decrease gasoline consumption by 7.2 billion gallons annually by 2020 • Help Idaho meet Federal air quality standards • Automaker lawsuits in several states

6. Oregon Public Transportation • Oregon Transportation Enhancement Program • Rural Transportation Assistance Program • Intercity Passenger Program • Transportation and Growth Management Program • Pedestrian and bicycle program grants • Safe routes to schools

7. Washington • Rural Mobile Grants • Intercity Bus Transportation • Job Access and Reverse Commute

8. Market Transformation

9. Transforming the Market MANDATES FLEX/ALT FUEL VEHICLES USING 85% BLENDS USE OF 10% BIOFUEL BLENDS COST PLUG IN HYBRIDS HYBRID/HIGH MPG VEHICLES INCENTIVES TARGETED GENERAL

10. BOOKENDS BOOKENDS Building Consensus MANDATES MINIMUM AFV PURCHASE REQUIREMENT RENEWABLE FUEL STANDARD COST R&DGRANTS REBATESTAX INCENTIVES INCENTIVES TARGETED GENERAL

11. Biofuels

12. Alt. Fuel Recommendations • It is in the interest of Idaho to promote the production and use of alternative fuels, through policies, strategies and actions that are cost-effective and environmentally sound. In adopting incentives and other measures to promote alternative fuels the state shall consider the benefits to economic development, security, reliability, environmental protection and public health. Potential measures may include but are not limited to: • Encouraging state fleet purchases and use of alternative fuel and efficient vehicles • Incentives and investment tax credits for Idaho growers and producers of alternative fuels • Encourage future development of cellulosic ethanol production in Idaho • Adopting cleaner tailpipe emission standards • Incentives for the purchase of FFV and alt. fuel vehicles • Incentives and grants for retail and wholesale alternative fuel supply infrastructure • Incentives and tax credits for the sale and purchase of alternative fuels • Promoting research and development and business-university partnerships to speed commercialization of alternative fuel technologies. • Education and promotion campaigns for consumers and regulators • Incentives may include fuel tax deduction or exemptions, tax credits, loans, loan guarantees, grants, parking and HOV lane privileges, • Maintain flexibility to adapt to changing and improving technology and adjust to price and supply issues in a maturing market.

13. Biofuel Proposals • Grants to retailers for biofuels infrastructure • Investment tax credit for biofuels infrastructure upstream of retailers • Promote culture of conservation • Countercyclical biofuel producer incentive • Flexible fuel vehicle state fleet pilot project • Incentives to use feedstock byproducts from biofuel production • Include synthetic fuels in definition of alternative fuels

14. Production Incentives • Grants for producers • Incentives for producers • Incentives for growers • Loan guarantees/tax credits for producers • Renewable fuels development program • Business-university partnerships • Support Federal R&D efforts • Rely on existing incentives

16. Biofuel Demand • Adopt alt. fuel infrastructure requirement • Adopt Alt Fuel Infrastructure Goal • Adopt RFS goal • Tax incentives for retail sale of biofuels • Adopt Mandatory RFS Standard • Support 10% federal agency biofuel purchase requirement • Lower fuel tax for biofuels • Incentives/grants for retail infrastructure • Public education and promotion of biofuels • Study options for RFS • Expedite Permitting • Require stations be allowed to offer ethanol blends • Support 10 year extension of federal biofuel tax credits

17. Petroleum & Transportation

18. Petroleum Recommendations • Promote conservation as primary means of improving the reliability and cost of Idaho’s transportation fuel supply while also encouraging development of new resources • Support responsible exploration and production of petroleum supply and expansion of transmission, storage and distribution infrastructure benefiting Idaho

19. Transportation Recommendations • Work with other states to promote increase in Federal CAFE standards • Encourage use and purchase of hybrid, high mileage, alternative and flex fuel vehicles. Explore opportunities for adoption by private and state owned fleets, public transportation and school busses. • Promoting use and expansion of public transportation where effective in reducing vehicle miles traveled, including intercity transportation where feasible • Promote reduction of truck and tour bus idling • Investigate encouraging use of rail and intermodal freight transportation where feasible

20. Vehicle Program Categories

21. Alt Fuel/High Efficiency Vehicles • Adopt CA Clean Cars Program (OR, WA) • Min. avg. fuel efficiency • Min alt fuel vehicles requirement • Freebates • Reduced registration fees • Sales Tax Exemption • Carpool/State Parking • Support efforts to encourage development of plug-in hybrid • HOV Lane use (w/ MPG qualifier)

22. Public Transportation • HOV Lanes • Grants, loans, technical assistance for intercity transportation • Bikes on Transit • Commuter checks • Grants, loans, technical assistance to transportation agencies • Employer incentives for carpooling

23. Idle Reduction • Require automatic shutdown on new engines • Incentives for installation of idle reduction technology at truck stops • Time Limits for bus idling • Time Limits for truck idling

24. Natural Gas

25. Natural Gas Recommendations • Encourage the highest and best use of natural gas. • Encourage direct end use in applications for which natural gas is the most efficient energy source. • Where appropriate and cost effective encourage use of natural gas vehicles for company and/or state owned fleets • Support responsible exploration and production of natural gas supply and expansion of transmission, storage and distribution infrastructure • Support non traditional natural gas supply resources, including landfill methane, anerobic digesters, biomass methane. • Support siting of LNG terminals in the US as well as and infrastructure that provides delivery capability to Idaho

26. Direct Use of Natural Gas • Incentives & grants for non-traditional methane sources • NGV incentives for state and local fleets • Incentives for fuel switching • Consider fuel switching as resource in IRP • Ensure PUC and utility policies encourage efficient customer choice • Actively support responsible exploration and infrastructure enhancements • Consumer Education