1. A 100 Percent Renewable Fueled Transportation System David Morris Vice President Institute for Local Self-Reliance dmorris@ilsr.org Governors’ Ethanol Coalition March 1, 2005 Washington, D.C.

2. The U.S. can produce at least 100 Billion gallons of ethanol per year on a sustainable basis A 100% renewable-fueled transportation system requires a dual electricity/liquid fuel propulsion system Biofuels production significantly benefits farmers and rural areas only when biorefineries are farmer-owned The Argument

3. The Prospects for Ethanol

4. U.S. Ethanol Production Has Tripled Since 2001 Gallons

5. U.S. and Brazilian Ethanol Production

6. U.S. ethanol facilities are centered in corn states

7. The U.S. can produce at least 100 billion gallons of ethanol on a sustainable basis Gallons 5 DT/acre

8. Oil receives 3-30x more subsidies than ethanol Source: Institute for Local Self-Reliance-Oil Data, 1996; Ethanol Data, 2004

9. An ethanol strategy costs far less than a hydrogen strategy ComponentH2EtOH Fuel(GGE)/future $5/$2.50$1.70-2.15 Vehicle(Increment al Cost/future $200k/$10k (F C) $150 (FFV) Fueling Station/ # cars per day $500k/10$50k/200 Storage/Increment al Cost) ?$0

10. The Need for Electricity

11. Gasoline consumption is increasing 4x faster than ethanol consumption (2002-2005) Gallons

12. A hybrid future? Source: IEA March 2004 % of car sales

13. Plug-in hybrids promise the most efficient transportation system mpg-equiv.

14. Electricity can provide up to 100 percent of vehicle fuel %

15. Electricity for motors-Renewable Portfolio Standard(e.g. wind, PV, biomass, hydro, etc.) Engine fuel-Renewable Energy Standard(e.g. biomass, water, etc.) A dual renewable fuel strategy for transportation

16. Maximizing the Benefit to Agriculture

17. Additional revenue to farmers from ethanol sales

18. # of Plants mid-2005 Farmer-owned refineries account for almost half of all U.S. ethanol plants 98 48

19. Farmer-owned plants produce more ethanol than ADM

20. Minnesota Model Producer Payment-20 cents per gallon In-state Up to 15 million gallons a year For 10 years Result 15 plants as of November 2004 About 9,000 farmer owners Producer payment ending on 75% of production as of 2006

21. Transportation fuel could dominate agriculture markets Tons 13M

22. The U.S. Carbohydrate Economy (circa 2050) Feedstock(tons)1,000,000,000 Ethanol(gals)80,000,000,000 Chemicals(tons)250,000,000 Fossil Energy Input 0 # of Biorefineries2,000 # of Owners1,200,000