The Iowa NSF EPSCoR Energy Policy platform is holding a series of energy policy seminars at Iowa State University. The sessions are free and do not require registration. Please scroll down to view streaming video or presentation slides from past seminars.
James H. Stock
April 4, 2016 | View streaming video
3:40 - 5:00 p.m.
Curtiss Hall 0013, Iowa State University
The U.S. Renewable Fuel Standard (RFS) requires blending increasing quantities of biofuels into the U.S. surface vehicle fuel supply. In 2013, the fraction of ethanol in the gasoline pool effectively reached 10%, the ethanol capacity of the dominant U.S. gasoline blend (the “E10 blend wall”). During 2013-2015, the price of RINs—tradeable electronic certificates for complying with the RFS—fluctuated through a wide range, largely because of changes in actual and expected policy combined with learning about the implications of the E10 blend wall. RINs are sold by biofuels producers and purchased by obligated parties (refiners and importers), who must retire RINs in proportion to the petroleum they sell for surface transportation. As a result, RINs in effect serve as a charge on obligated fuels and a corrective subsidy for lower-carbon renewable fuels, and are neutral for fuels outside the RFS. In theory, RIN prices provide incentives to consumers to use fuels with a high renewable content and to biofuels producers to produce those fuels, and as such are a key mechanism of the RFS.
This paper examines the extent to which RIN prices are passed through to the price of obligated fuels, and provides econometric results that complement the graphical analysis in Burkholder (2015). We analyze daily data on RINs and fuel prices from January 1, 2013 through March 10, 2015. When we examine wholesale prices on comparable obligated and non-obligated fuels, for example the spread between diesel and jet fuel in the U.S. Gulf, we find that that roughly one-half to three-fourths of a change in RIN prices is passed through to obligated fuels in the same day as the RIN price movement, and this fraction rises over the subsequent few business days. Using six different wholesale spreads between obligated and non-obligated fuels, we estimate a pooled long-run pass-through coefficient of 1.01 with a standard error of 0.12.
We also examine the transmission of RIN prices to retail fuel prices. The net RIN obligation on E10 is essentially zero over this period, and indeed we find no statistical evidence linking changes in RIN prices to changes in E10 prices. We also examine the price of E85 which, with an estimated average of 74% ethanol, generates more RINs than it obligates and thus in principle receives a large RIN subsidy. In contrast to the foregoing results, which are consistent with theory, the pass-through of RIN prices to the E85-E10 spread is precisely estimated to be zero if one adjusts for seasonality (as we argue should be done), or if not, is at most 30%. Over this period, on average high RIN prices did not translate into discounted prices for E85.
James H. Stock is the Harold Hitchings Burbank Professor of Political Economy, Faculty of Arts and Sciences and member of the faculty at the Harvard Kennedy School. He received a M.S. in statistics and a Ph.D. in economics from the University of California, Berkeley. His research areas are empirical macroeconomics, monetary policy, econometric methods, and energy and environmental policy. He is a coauthor with Mark Watson of a leading introductory econometrics textbook and is a member of various professional boards. He previously served as Managing Editor of the Review of Economics and Statistics from 1992-2003, as Chair of the Harvard Economics Department from 2007-2009, as Co-Editor of Econometrica from 2009-2012, and as Member of President Obama’s Council of Economic Advisers from 2013-2014.
Michigan State University
March 25, 2016 | View streaming video replay.
1306 Elings, Iowa State University
We show that oil production from existing wells in Texas does not respond to oil prices, while drilling activity and costs respond strongly. To explain these facts, we reformulate Hotelling's (1931) classic model of exhaustible resource extraction as a drilling problem: firms choose when to drill, but production from existing wells is constrained by reservoir pressure, which decays as oil is extracted. The model implies a modified Hotelling rule for drilling revenues net of costs, explains why the production constraint typically binds, and rationalizes regional production peaks and observed patterns of prices, drilling, and production following demand and supply shocks.
Soren Anderson is an associate professor with the Department of Economics and Department of Agricultural, Food, and Resource Economics at Michigan State University. He specializes in energy economics, oil, gasoline, and ethanol markets, and automobile fuel economy.
Arizona State University
March 2, 2016 | View streaming video replay
1306 Elings, Iowa State University
Studies of the economic potential of cellulosic biofuels suggest that the policy incentives in place should be enough to spur the development of an industry. This picture does not match the reality of the industry development thus far. The difference can be largely explained by costs associated with scale up to commercial production and a host of risks. This talk examines these transition costs and risks with the goal of better informing the policy process. I argue that these costs are poorly defined and the most important for evaluating the innovation-forcing policies, such as the cellulosic component of the Renewable Fuel Standard and California’s low carbon fuel standard. Past analysis of these policies have failed to properly account for them.
Dr. Parker develops simulation models to shed light on the economic viability and environmental implications of alternatives to petroleum-based transportation fuels. The simulation models are powerful optimization tools for complex systems-level analysis. They are spatially explicit, include important details about alternative fuel technologies, and bring together both the supply chain and demand components of these industries. In addition, his work analyzes policies aimed at catalyzing transitions to renewable energy. He received his B.S. in Physics from Wake Forest University in 2001, an M.S. in Transportation Technology and Policy from the University of California, Davis in 2007, and earned a PhD in Transportation Technology and Policy from University of California, Davis in 2011.
S. Jack Hu
University of Michigan
February 15, 2016 | Watch streaming video replay
Noon - 1:00 p.m., lunch provided
2004 Black Engineering, Iowa State University
Advanced manufacturing has been the buzz recently. What is advanced manufacturing? How can researchers in academia contribute to it? I offer my personal perspectives on this important topic and discuss challenges and opportunities in advanced manufacturing research and innovation.
Two case studies will be used to illustrate how scientific methods and technological innovations can be translated into factory implementations. The first case study is an in-line non-destructive evaluation and real-time control system for joining process quality in lithium-ion battery manufacturing where our work has led to partial implementation on the factory floor. The second case study is on machining process control using high definition metrology. Implementation has been limited in spite of the great promise of this technology. Finally, I discuss the concept of the National Network for Manufacturing Innovation and how governments, academia and industry are partnering together for manufacturing innovation.
S. Jack Hu is Professor of Mechanical Engineering, Professor of Industrial and Operations Engineering, and the J. Reid and Polly Anderson Professor of Manufacturing at the University of Michigan. He is also the Vice President for Research at Michigan, a $1.3B research enterprise. Dr. Hu’s teaching and research interests include manufacturing systems design and operations, assembly modeling, and statistical quality methods. He is the recipient of various awards and was elected a member of the National Academy of Engineering in 2015. Dr. Hu received his B.S. from Tianjin University, China in 1983, M.S. and Ph.D. from the University of Michigan in 1986 and 1990 respectively.
Noon-1:20, October 21, 2015
1344 Howe Hall, Iowa State University
California has among the world’s most ambitious climate policy goals. New and innovative market-based strategies, guided by technical research, are being tested to achieve the most cost-effective reductions. Anthy Alexiades of the California Air Resources Board will give an overview of California’s multi-pronged strategies and delve into the design of the Low Carbon Fuel Standard (LCFS), which uses a life-cycle emissions approach to tackle the state’s largest source of emissions: transportation sector. Low-carbon biofuels from the Midwest have been a critical source for compliance but as life-cycle based regulations shift demand toward lower impact fuels, what opportunities exist in Iowa to remain competitive in the transportation fuel market of tomorrow? Join us for this discussion of the challenges, successes and lessons learned in the first 5 years.
As an Air Resources Engineer for the California Air Resources Board, Anthy Alexiades evaluates fuel production pathway applications to determine the full fuel cycle carbon intensity of transportation fuels consumed in California. Anthy Alexiades was a graduate student at the University of California Davis and worked on life cycle assessment and carbon footprinting of renewable energy systems and bio-based products. Formerly, she was Product Development Associate II for Ceres, Inc. at Thousand Oaks, CA, and worked on a team to design, automate, and validate a lab-scale process to measure the conversion efficiency of cellulosic biomass to fermentable sugars. She trained to conduct full wet chemical analysis of plant tissue and helped develop a method for distinguishing various sugars in sweet sorghum. She learned multivariate analysis and helped build models correlating near infrared spectra with composition data for rapid chemical analysis.
3:40-5:00, October 7, 2015
Davidson Room, 1306 Elings Hall, Iowa State University
What are the feasibility, costs, and environmental implications of large-scale bioenergy? We investigate this question by developing a detailed representation of bioenergy in a global economy-wide model. We develop a scenario with a global carbon dioxide price, applied to all anthropogenic emissions except those from land-use change, that rises from $25 per metric ton in 2015 to $99 in 2050. This creates market conditions favorable to biomass energy, resulting in global non‑traditional bioenergy production of ~150 exajoules (EJ) in 2050. By comparison, in 2010 global energy production was primarily from coal (138 EJ), oil (171 EJ) and gas (106 EJ). With this policy, 2050 emissions are 42% less in our Base Policy case than our Reference case, although extending the scope of the carbon price to include emissions from land-use change would reduce 2050 emissions by 52% relative to the same baseline. Our results from various policy scenarios show that lignocellulosic (LC) ethanol may become the major form of bioenergy, if its production costs fall by amounts predicted in a recent survey and ethanol blending constraints disappear by 2030; however, if its costs remain higher than expected or the ethanol blend wall continues to bind, bioelectricity and bioheat may prevail. Higher LC ethanol costs may also result in expanded production of first generation biofuels (ethanol from sugarcane and corn) so that they remain in the fuel mix through 2050. Deforestation occurs if emissions from land-use change are not priced, although the availability of biomass residues and improvements in crop yields and conversion efficiencies mitigate pressure on land markets. As regions are linked via international agricultural markets, irrespective of the location of bioenergy production, natural forest decreases are largest in regions with the lowest barriers to deforestation. In 2050, the combination of carbon price and bioenergy production increases food prices by 3.2%–5.2%, with bioenergy accounting for 1.3%–3.5%.
Dr. Niven Winchester is an Environmental Energy Economist at the MIT Joint Program on the Science and Policy of Global Change. Dr. Winchester’s research focuses on analyses of climate, energy and trade policies using applied general equilibrium analysis. Recent studies assess the effectiveness of border carbon adjustments, China’s trade-embodied CO2 emissions, the feasibility, costs, and environmental implications of large-scale biomass energy, and the economic and emissions impacts of US aviation biofuel goals. Prior to joining MIT, Dr. Winchester held a faculty position at the University of Otago and earned a PhD from the University of Nottingham. Dr. Winchester’s research has informed several organizations on trade and energy issues, including the OECD, the Federal Aviation Administration, and the New Zealand Ministry of Foreign Affairs and Trade. In 2013, Dr. Winchester was awarded a Global Trade Analysis Project Research Fellowship for outstanding research. He is currently co-editor of the Journal of Global Economic Analysis.
Carlos Grateron and Luis Enrique Prado
USDA Foreign Ag Services Cochran Fellows
3:40-5:00, September 30, 2015
Davidson Room, 1306 Elings Hall, Iowa State University
Join us for an international perspective on second-generation ethanol. The Cochran Fellows will discuss Colombian biofuels policy, the Biofuels National Program, 1G ethanol production results, and 2G ethanol challenges.
Carlos Grateron is a chemist from the Industrial University of Santander, and received a Master’s degree in Engineering from the Libre University in Colombia. He completed graduate studies in quality management at the Northern University in Colombia and has experience managing projects with biofuel producing plants and quality assurance processes management. Grateron currently serves as Technical Director of the National Federation of Biofuels of Colombia, an entity that strives to promote the sustainable development of the agro-industry of biodiesel and bioethanol in Colombia.
Prado Uribe is Distillery Assistant Director at Incauca S.A., the largest sugar mill in Colombia. He was senior engineer at the Incauca S.A. fuel ethanol plant for ten years and coordinated HSEQ compliance for the fuel ethanol process. Uribe attended the University of Oklahoma and Universidad Industrial de Santander, Colombia.
Carnegie Mellon University
May 4 2015 - Rescheduled from February 2, 2015
Noon-1:20, 1306 Elings Hall, Davidson Room, Iowa State
View streaming video replay of this seminar.
The increased availability of economically recoverable U.S. natural gas from shale has initiated policy debates on economic and environmental issues associated with unconventional gas production, use, and exports. Many states and communities are reaping the benefits of increased economic activity associated with unconventional natural gas production. At the same time, governments are experiencing external costs that are not directly covered from tax revenues or impact fees on oil and gas production. Objective quantitative research on these topics can inform federal, state, and local energy policy decisionmaking. This talk will highlight three recent research efforts surrounding unconventional natural gas: 1) monetized regional life cycle air quality challenges and benefits associated with Marcellus Shale natural gas extraction in Pennsylvania 2) monetized infrastructure damages to state roadways associated with Marcellus Shale natural gas extraction in Pennsylvania and 3) the life cycle greenhouse gas emissions and costs associated with U.S. liquefied natural gas exports, considering additional uncertainties in the life cycle process and addressing industrial heating as an additional end use for the natural gas abroad. This research informs a more comprehensive discussion on the benefits and challenges of unconventional natural gas in the U.S.
Costa Samaras is an assistant professor in the Department of Civil and Environmental Engineering at Carnegie Mellon University. His research spans energy, climate change, infrastructure and defense analysis. Costa analyzes how energy technology and infrastructure system designs affect energy use and national security, resiliency to climate change impacts, economic and innovation outcomes, and life cycle environmental externalities. He is an affiliated faculty member in Carnegie Mellon's Scott Institute for Energy Innovation and the College of Engineering's Energy Science, Technology and Policy Program. Costa is also an Adjunct Senior Researcher at the RAND Corporation and a Professor at the Pardee RAND Graduate School. He served on a National Academies Committee evaluating the Department of Energy's advanced transportation energy research portfolio, serves on the Transportation Research Board's Alternative Transportation Fuels and Technologies Committee, is an Associate Editor of the journal Renewable and Sustainable Energy Reviews, and serves on the American Society of Civil Engineers Committee on Adaptation to a Changing Climate. From 2009 to 2014 he was a RAND Corporation researcher, most recently as a Senior Engineer. From 2008 to 2009 he was a post-doctoral fellow in the Climate Decisionmaking Center at Carnegie Mellon. From 1999 to 2004 he was an engineer working on several multibillion-dollar infrastructure megaprojects in New York, and also worked on the rebuilding of the Subway Line underneath of the World Trade Center after the attacks of September 11, 2001.
Costa received a joint Ph.D. in Civil and Environmental Engineering and Engineering and Public Policy and from Carnegie Mellon, a M.P.A. in Public Policy from the Wagner Graduate School of Public Service at New York University, and a B.S. in Civil Engineering from Bucknell University. He also is a LEED Accredited Professional with a building design and construction specialty. Costa tweets about energy and climate topics at @CostaSamaras.
Texas Tech University
April 21, 2015
3:40-5:00, 1306 Elings Hall, Davidson room, Iowa State
Watch video replay of this seminar.
"We basically have three choices: mitigation, adaptation and suffering. We’re going to do some of each. The question is what the mix is going to be. The more mitigation we do, the less adaptation will be required and the less suffering there will be." — John Holdren
Climate change is evident in Iowa, throughout the United States, and around the world. Assessing its impacts on agriculture, water, and the economy is essential to setting sound national and global targets that minimize the costs and maximize the benefits of both adaptation and mitigation. Conventional wisdom, first codified in the UNFCCC’s 1992 agreement to stabilize greenhouse gas concentrations, suggests impacts are expected to scale with atmospheric concentrations. Here, I explore the relationship between global temperature targets — typically expressed in degrees Celsius, from +2 to +4—and projected future changes in a series of regional impact-relevant metrics, from drought to energy demand, to answer the question: To what extent do differences in global targets translate into differences in impacts on the Midwest?
Katharine Hayhoe is an Associate Professor in the Public Administration program at Texas Tech University and Director of the Climate Science Center at Texas Tech, part of the South-Central Climate Science Center. Her research focuses on developing and applying high-resolution climate projections to evaluate the future impacts of climate change on human society and the natural environment.
UC Davis Institute of Transportation Studies
April 6, 2015
3:40-5:00, 1306 Elings Hall, Davidson room, Iowa State
View streaming video replay of this seminar.
Several jurisdictions in the US, Canada, and Europe use performance standards based on life cycle assessment (LCA) to regulate the climate effects of transportation fuels, and interest in this novel form of regulation is growing. These standards require fuel blenders and refiners to reduce the life cycle GHG intensity of their products through in situ improvements in existing processes, by blending lower-GHG-intensity fuels into their mix, or by purchasing credits from over-complying parties. Performance-based regulations have a well-deserved reputation as more efficient than command-and-control regulation in many important contexts, but their operation depends on government’s ability to measure and monitor performance at the point of regulation, and their welfare efficacy depends on a clear link between the performance measure and the outcomes of interest.
In this talk, Plevin will discuss the semantics and uses of LCA, epistemological issues with “carbon intensity”, the challenges of modeling complex environmental problems, and the requirements for a successful performance-based regulation.
Richard Plevin is a research scientist in the Sustainable Transportation Energy Program of the Institute of Transportation Studies at UC Davis. His research focuses on techniques to estimate and understand the climate effects of transportation and transportation fuels and policies to mitigate these effects. His research interests include the climate effects of bioenergy, life cycle assessment (LCA) methodology, extending LCA toward integrated energy-economy-environment modeling by accounting for market-mediated effects, and improving the representation and communication of uncertainty in computer-based modeling systems. His recent projects include the development of an emissions accounting model for biofuels-induced land use change that processes results from the GTAP computable general equilibrium model, the development and analysis of Monte Carlo simulations to quantify parametric uncertainty in the combined GTAP/emissions accounting system. He is currently developing tools to incorporate uncertainty and robustness analysis into consequential LCA models of the climate effects of fuel policy alternatives. Dr. Plevin received masters and doctoral degrees from the Energy and Resources Group at UC Berkeley, and holds MS and BS degrees in computer science from Yale University and the SUNY Albany, respectively. He was a contributing author to the IPCC’s Fifth Assessment Report, Working Group III, in both transportation and biofuels.
Dominique van der Mensbrugghe
The growing concerns with the impacts of climate change, combined with the 2007/08 price crisis and its aftermath has highlighted the importance of potential land and water constraints and the ability of the planet to feed a growing population—that could reach up to 10 billion persons under some scenarios. One of the reactions to these concerns has been a renewed interest in quantitative analysis of future scenarios for world agriculture and food security with a focus on natural resource constraints. It is clear from recent studies that there is a wide range of potential outcomes in terms of price evolution, resource availability, and trade—many of which are linked to different assumptions regarding changes in technology, preferences and future resource availability. However, the underlying causes of this range of outcomes is not fully understood by the analysts, nor more importantly, by policy makers that are looking for policy guidance to avoid potentially disastrous outcomes. A group of 10 prominent teams of global economic models of agriculture was assembled in the fall of 2011 under the aegis of the relatively new network known as the Agricultural Modeling Intercomparison and Improvement Project (AgMIP). The teams undertook a range of identical simulations, harmonizing on baseline assumptions for population, GDP and exogenous yield growth, to elucidate the key factors that underlie differences in model results. This seminar will describe the key components of the models, the harmonization assumptions, land-use specification in the models and highlight the range of outcomes focusing in particular on land-use.
Dominique van der Mensbrugghe is Research Professor and Director of the Center for Global Trade Analysis (GTAP) at Purdue University. The focus of his work during his career has been on long-term structural change of the global economy and the analysis of global economic policy issues—including agricultural policies, regional and multilateral trade agreements, demographics and international migration, the Millennium Development Goals, and climate change. His work has appeared frequently in various economic journals and the agencies’ flagship reports and he is one of the world’s experts on global computable general equilibrium modeling.
Lawrence Livermore National Laboratory
February 19, 2015 | Watch video replay of this seminar
12:30-1:15, Alliant Energy - Lee Liu Auditorium, Howe Hall, Iowa State
Lunch served in Howe Hall ground-floor atrium, 12-12:30 p.m. Please RSVP to Jill Cornelis by Feb. 16 firstname.lastname@example.org
The US has entered an age of hydrocarbon abundance with oil production at 1970 levels and natural gas use expanding rapidly, replacing coal in power production. While this is providing an enormous economic stimulus to the US, it presents a challenge to in terms of motivating the adoption of technology that is more carbon-neutral than gas. Impacts are currently seen across the board in carbon capture and storage, and will be seen in renewable energy as well.
In this talk, Aines will discuss the current US progress in carbon capture and storage (CCS), focusing on the Department of Energy programs in this area. Aines will incorporate the impacts of gas production, and his projections of the future of gas in this country and overseas, into a discussion of the most likely targets for developing new low-carbon technologies in this country. Finally, Aines will discuss the potential for truly zero- or negative-carbon technology, which will be needed in the 2030 to 2050 time frame given our current global carbon emission trends.
Roger Aines leads the development of carbon management technologies at Lawrence Livermore National Laboratory, working since 1984 in US national laboratory system. Aines’ work has spanned nuclear waste disposal, environmental remediation, applying stochastic methods to inversion and data fusion, managing carbon emissions and sequestration monitoring and verification methods. Aines takes an integrated view of the energy, climate, and environmental aspects of carbon-based fuel production and use. His current focus is on efficient ways to remove carbon dioxide from the atmosphere and safer methods for producing environmentally clean fuel. He holds 13 patents and has authored more than 100 publications.
Aines holds a Bachelor of Arts degree in Chemistry from Carleton College, and Doctor of Philosophy in geochemistry from the California Institute of Technology.
Aines can be contacted at (925) 423-7184 or email@example.com.
Sheldon (Xiaodong) Du, University of Wisconsin-Madison
December 4, 2014 | Watch video replay of this seminar.
3:40 - 5:00 p.m.
Davidson Room, 1306 Elings Hall, Iowa State University
Corn ethanol in the form of E10 is currently blended into over 90% of the nation’s gasoline and becomes an important component of the US transportation fuel supply. Cellulosic ethanol produced from non-food based feedstock is overcoming technological and economic barriers and should eventually be capable of supplying a significant proportion of the market. However, the 10% “blending wall” restricts the growth of traditional and advanced biofuel industries beyond the current level. Overcoming this obstacle depends critically on the deployment of a higher percentage ethanol-gasoline blend such as E85, which can only be used in flex-fuel vehicles (FFVs). The widespread consumer adoption of FFVs is therefore critical and is expected to have significant impact on the US biofuel market.
This study attempts to (i) characterizes the spatial and temporal patterns of FFV adoption and development of E85 retail stations across the US regional markets, (ii) investigate driving forces of FFV adoption, including policy incentives, fuel prices and E85 retail fueling stations, emphasizing how FFV penetration and E85 retail infrastructure are related, and (iii) develop a partial equilibrium model of the US biofuel market in order to quantify the market impact of future development of the E85 and FFV markets. We explicitly model ethanol supply, demand, stock, and export with a focus on distinctive demands for E10 and E85, the latter of which is driven by a large scale adoption of FFVs.
Du is an assistant professor in agricultural and applied economics at the University of Wisconsin-Madison and is part of the Wisconsin Energy Institute. Du earned his PhD in Economics from Iowa State University in 2008. Du is interested in economics and policy issues associated with traditional and renewable energy resources, technologies, and markets, especially the transportation fuel sector. He also conducts research on the interactions between energy, agricultural, and financial markets.
Deepak Rajagopal, School of Public and Environmental Affairs, Indiana University and Institute of the Environment and Sustainability, University of California, Los Angeles
September 11, 2014 | Watch video replay of this seminar.
3:40 - 5:00 p.m.
1344 Howe Hall, Iowa State University
Restricting the rate of greenhouse gas (GHG) emissions appears a politically more feasible alternative to economists' prescription to price emissions. While emission intensity standards (EIS) are quite common in the real world, we are not aware of another economy-wide GHG EIS barring the regulation analyzed herein. In this paper, we econometrically analyze firm-level data from one-of-a-kind EI regulation, the Specified Gas Emitters Regulation (SGER) adopted in 2006 by the Canadian province of Alberta, that world's second largest oil reserves. After developing a model of firm behavior under a generic EIS with SGER-like features, we test hypotheses relating to the impact on emissions, emission intensity and the cost-effectiveness of GHG abatement in the industrial sector. We find that the regulation had no impact on annual emissions or the emission intensity of the average facility and this was true for the average facility in all the 12 different economic sectors covered by the regulation. Compliance was achieved predominantly through the purchase of offset credits from unregulated sectors and by payments to a carbon fund in lieu of non-compliance. We discuss the implications of these findings for some frequently cited estimates of marginal cost of GHG abatement.
Dr. Rajagopal's research interests include Economics of climate change, Economics of renewable energy, Impact of climate change on Agriculture, Multi-criteria decision analysis, Consequential life cycle assessment. See his web site here: http://www.environment.ucla.edu/rajagopal/
Maximilian Auffhammer, UC-Berkeley
May 5, 2014, 3:40-5:00 p.m. | Watch streaming video replay of this seminar.
1344 Howe Hall
Increased demand for cooling and decreased demand for heating in the built environment is one of the main anticipated modes of adaptation to higher temperatures due to climate change. California's residential sector uses relatively little electricity for heating. It is therefore expected that the demand for electricity will increase at the intensive margin as households operate existing air conditioners more frequently. Further, in many regions there will be an additional extensive margin adjustment as households will install air conditioners where there currently are few. Using the majority of California's residential electricity bills this paper provides reduced form estimates of the projected consumption impacts from the intensive and extensive margins separately using a two-stage method. It shows that accounting for capital investment lead to significantly higher projections of electricity consumption.
Maximilian Auffhammer is an Associate Professor with a joint appointment in International Area Studies and Agricultural and Resource Economics. He received his Ph.D. in Economics from the University of California at San Diego. His research agenda focuses on forecasting Greenhouse Gas Emissions as well as studying the impacts of air pollution on agriculture. Geographically he is mainly interested in China and India as well as his chosen home - California.
In the International Area Studies program he teaches Intermediate Microeconomic Theory (without calculus!) and the Economics of Climate Change. In addition, he teaches a Ph.D. level course in econometrics. He received a Distinguished Teaching Award in 2009.
William Hogan, Harvard
April 24, 2014, 3:40-5:00 p.m. | Watch streaming video replay of this seminar
0013 Curtiss Hall
The challenge of the Green agenda, to address climate change and support clean energy, is daunting. Electricity markets play an important role, directly through the current use of fossil fuels and indirectly through proposed policies that envision electrification of transportation and other sectors. Electricity market design can promote efficiency and innovation, or stand as a barrier to be overcome. Examples of current issues in market design illustrate the opportunities and tasks ahead.
William W. Hogan, Raymond Plank Professor of Global Energy Policy, is research director of the Harvard Electricity Policy Group (HEPG), which is examining alternative strategies for a more competitive electricity market, and a member of the Appointments Committee. Hogan has been a member of the faculty of Stanford University where he founded the Energy Modeling Forum (EMF), and he is a past president of the International Association for Energy Economics (IAEE). Current research focuses on major energy industry restructuring, network pricing and access issues, market design, and energy policy in nations worldwide. Hogan received his undergraduate degree from the U.S. Air Force Academy and his PhD from UCLA. Selected papers are available on his Web site, www.whogan.com.
Estimating the carbon intensity of biofuel production pathways is important in order to meet greenhouse gas targets set by government policy. Life cycle assessment methods have been used to quantify the greenhouse gas emissions associated with different crop production systems and feedstock conversion technologies. Examples of using life cycle methods to evaluate mitigation strategies, coproduct use, and abatement costs will be presented.
Paul Adler is a Research Agronomist with the United States Department of Agriculture (USDA), Agricultural Research Service. His research focus is on the potential use of marginal croplands for biofuel production conducting research at multiple scales on the ecology and management of grasslands and life cycle assessment of the greenhouse gas emissions of a range of bioenergy crop production systems. He currently serves on the USDA Croplands/Grazing Lands Working Group to develop science-based methods and technical guidelines for quantifying greenhouse gas sources and sinks in the forest and agriculture sectors. He has led the biogeochemical modeling efforts for consideration of winter barley as an advanced fuel pathway under RFS2, providing input for EPA’s Transportation and Climate Division analysis. He has served on the expert panel on Greenhouse Gas Emissions for the Council on Sustainable Biomass Production, Chesapeake Bay Commission Biofuels Advisory Panel, and as a technical advisor for the USDA-Foreign Agricultural Service under the Department of State’s Energy and Climate Partnership of the Americas initiative in Uruguay.
Jerome Dumortier, Indiana University-Purdue University Indianapolis
March 24, 2014, 3:40-5:00 p.m. | View streaming video replay of this seminar
1344 Howe Hall
Several states have a renewable portfolio standard (RPS) and allow for biomass co-firing to meet the RPS requirements. In addition, a federal renewable fuel standard (RFS) mandates an increase in cellulosic ethanol production over the next decade. This paper quantifies the effects on local biomass supply and demand of different co-firing policies imposed on 398 existing coal-fired power plants. Our model indicates which counties are most likely to be able to sustain cellulosic ethanol plants in addition to co-firing electric utilities. The simulation incorporates the county-level biomass market of corn stover, wheat straw, switchgrass, and forest residues as well as endogenous crop prices. Our scenarios indicate that there is sufficient feedstock availability in Southern Minnesota, Iowa, and Central Illinois. Significant supply shortages are observed in Eastern Ohio, Western Pennsylvania, and the tri-state area of Illinois, Indiana, and Kentucky which are characterized by a high density of coal-fired power plants with high energy output.
Jerome Dumortier received his Ph.D. in Economics from Iowa State University in 2011. His research focuses on energy and agricultural economics, especially bioenergy and land-use change. In the past, the interaction between the agricultural, energy, and carbon policies have been subject of his work. Among others, he has worked as a consultant for the European Commission’s Joint Research Center (JRC) to evaluate the land-use change implications of EU biofuel policy. His current research agenda emphasizes on the economics of switchgrass for biomass co-firing and biofuel production; and the market penetration of electric vehicles. He has published peer-reviewed academic articles that use simulation models to determine the effects of biofuel and carbon policies on agricultural productions.
The presentation will go into the current status of the (heated) societal debate around the possible role and sustainability (or lack of it) of the large scale use of biomass for energy and materials and current market developments. Ongoing efforts on certification and development of sustainability frameworks have not brought the debate at ease so far. In particular indirect land use change and carbon payback time (the later in relation to the use of biomass forest resources) are fundamental barriers in further development of a biomass resource base.
The presentation will summarize the importance of the biobased economy to achieve sustainable futures for our energy system during this century. Both drivers and the magnitude of potential global demand (e.g. for biomaterials and fuels) and supply will be summarized. The key preconditions for realizing larger potentials of biomass will be discussed and the importance of deployment of sustainable biomass for staying within desired GHG emission and carbon budgets will be highlighted.
The presentation will go into detail on how the observed problems with respect to iLUC and (slow) carbon payback may be avoided by proper land management strategies and increasing resource efficiency. Different illustrations for different countries and settings will be given, backed by state-of-the-art spatially explicit land use scenario’s and impact analysis.
The presentation will close with some viewpoints on what would be possible ways forward for the biobased economy and key priorities for research, the market and policy.
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James Bushnell is an Associate Professor in the Department of Economics at the University of California, Davis, and a Research Associate of the National Bureau of Economic Research. Prior to joining UC Davis, he spent 15 years as the Research Director of the University of California Energy Institute in Berkeley, and two years as the Cargill Chair in Energy Economics and Director of the Biobased Industry Center at Iowa State University. Prof. Bushnell received a Ph.D. in Operations Research from U.C. Berkeley in 1993.
Prof. Bushnell has been actively involved in energy and environmental policy for over a decade. Since 2002, he has served as a member of the Market Surveillance Committee (MSC) of the California Independent System Operator (CAISO). He is currently a member of the Emissions Market Assessment Committee, an advisory committee to the California Air Resources Board. Both the MSC and EMAC were established to provide independent external monitoring and analysis to complement the internal market analysis functions of the institutions they advise.
Harnessing demand flexibility can enable more renewable integration. We start with a data driven analysis of the potential of flexible demands, particularly plug-in electric vehicle load. We first give a measure of flexibility and then show, based on an extensive data-set of driving patterns, that PEV load is flexible. We then illustrate that, if left unmanaged, these loads can exacerbate peaks in the load profile and increase the negative correlation of demand with wind energy production. We propose a simple local policy with very limited information and minimal coordination that can substantially increase the correlation of flexible demand with wind energy production. Such local policies could be readily implemented as modifications to existing "grid friendly" charging modes of plug-in electric vehicles.
Next, (if time permits) we discuss how aggregation of flexible loads can transform the loads into controllable assets that help maintain grid reliability by counterbalancing the intermittency due to renewables. We introduce a model that economically incentivizes the load to reveal its flexibility and provides cost-comfort trade-offs to the consumers. We establish the performance of our proposed model through evaluation of the price reductions that can be provided to the users compared to uncontrolled and uncoordinated consumption. We show that a key advantage of aggregation and coordination is provision of ancillary services to the system by load, which can account for a considerable price reduction to end users. The proposed scheme is also capable of preventing distribution network overloads.
Our work demonstrates the potential of flexible loads to mitigate the inherent intermittency of renewables in an economically efficient manner. We are currently cooperating with the Electric Reliability Council of Texas (ERCOT) ISO to set up a testbed for EV charging that is implementing these and other policies for harnessing load flexibility.
As we search for solutions to climate change and domestic energy insecurity, cellulosic ethanol has emerged (yet again) as a valuable approach to both problems. It can be created from a wide range of plant-based feedstocks that are themselves available in massive quantities. Because of this feedstock flexibility, most U.S. regions have the potential to procure sufficient feedstock quantities to supply multiple commercial plants. Much of this feedstock is not being used for food or other purposes, thus avoiding competition with other markets and needs. State and federal governments have invested many millions of dollars in cellulosic ethanol research, development, and loan guarantees. In addition, the 2007 Energy Independence and Security Act (EISA) included a progressively expanding, mandatory market for cellulosic ethanol that maxes out at 16 billion gallons consumed per year in 2022. However, no commercial-scale U.S. cellulosic ethanol plant is operational despite this favorable policy climate and massive investment. This presentation focuses on the policy dimensions of this history, the challenges behind commercialization, and a projection for the future of this biofuel form.
Speaker: Robert Johansson, Office of the Chief Economist, USDA, Washington, D.C.
Co-author: Lihong McPhail, Economic Research Service, USDA
April 11, 2013, 3:40 to 5:00 p.m. | View Presentation Slides (PDF)
0013 Curtiss Hall
Record corn prices and high ethanol production costs in 2012 led to ethanol production levels that were below the level required by the Renewable Fuels Standard (RFS). Indeed, governors of several states requested EPA to waive the national volume requirements for the RFS. The EPA denied the waiver requests on November 2012. Since, some have called on Congress to repeal outright the RFS, saying that the mandates are unworkable. Looking forward, most analysts point out difficulties in meeting the RFS over the next few years due to the “blend wall” in particular; i.e., increasing mandates will encourage ethanol blending at higher levels on one hand; decreasing gasoline consumption by U.S. consumers and limited retail distribution of E85 and/or E15 restrict the potential use of ethanol in the current car fleet, on the other. Therefore, a question facing policy makers is: how workable will the RFS be over the new few years? Obligated parties signal one answer to that question by buying or selling Renewable Identification Numbers, or RINs. RINs are certificates that individual gasoline and diesel producers and/or importers use to demonstrate compliance with the RFS. Obligated parties can buy or sell RINs or hold RINs for future compliance. When mandates are difficult to meet, RIN prices rise; and when mandates are relatively easy to meet, RIN prices approach zero. It should be the case that if the mandates are indeed becoming more difficult to meet over the next few years, the prices for RINs should rise to reflect expected compliance costs. We use a medium-run simulation model to conduct sensitivity analyses across important parameters that underlie implied RIN prices for the various components of the RFS. In particular the model is used in conjunction with government estimates of next year’s corn, soybean, ethanol, and biodiesel production and consumption to investigate which factors underlying RIN prices are the most important.
Tradable permits and carbon taxes are two market-based instruments commonly considered by policymakers to regulate CO2 emissions. Whereas the level of a tax is fixed and predetermined by authorities, the price of tradable permits is uncertain and is driven by market dynamics. The permit price is also expected to fluctuate commensurate with the prices of natural gas and electricity. Both instruments, however, offer electricity suppliers different incentives for adopting clean technologies. We explore the optimal investment timing in the context of a supplier who owns a coal-fired facility and is considering to introduce a clean technology in face of two types of CO2 regulation using a real options approach. We have two central findings. First, tradable permits could effectively trigger adoption of clean technologies at a considerably lower level of carbon price relative to a tax policy. Second, higher levels of volatility in permit prices are likely to induce suppliers to take early actions to hedge against carbon risks. Thus, offset and other price control mechanisms, which are commonly stipulated in proposed and existing climate policies with an attempt to reduce permit prices or to suppress prices volatility, are likely to delay clean technology investments.
Recently, after years of contentious debates, Australia has implemented carbon tax since July 2012, at A$23 per ton. However, the design was to phase the carbon tax into an emission trading system after 2015. Furthermore, the opposition leader in Australia has vowed to repeal the carbon tax if elected in the coming election in Nov 2013. Using this Australian situation as a case study, I will apply the findings of the research to show how this hybrid policy and the political uncertainty may affect the induction of clean technology.
Sustainability is a critically important goal for human activity and development. Energy sustainability is of great importance to any plans for overall sustainability given the pervasiveness of energy use, its importance in economic development and living standards, and the significant impacts that energy processes and systems have on the environment. Many factors that need to be considered and appropriately addressed in moving towards energy sustainability are examined in this presentation. These include appropriate selection of energy resources, enhancement of the efficiency of energy-related processes, and a holistic adoption of environmental stewardship in energy activities. In addition, other key sustainability measures are addressed, such as economics, equity, land use, lifestyle, sociopolitical factors, and population. The specific role that bioenergy has in the broader context of energy sustainability is described throughout. Conclusions provided are related both to options and pathways for energy sustainability and to the broader ultimate objective of sustainability.
Economists are equipped with a unique toolbox of skills which can be very valuable in both informing and shaping policy decisions. For example, we can contribute to policy design from both behavioral and budgetary perspectives by analyzing the expected outcomes and costs associated with a specific policy design. Funding for policy research is available from a wide range of organizations. For agricultural economists, this would include commodity and trade groups as well as government agencies. In most cases, researchers should be able to identify policy research projects which result in academic outcomes, impactful policy outcomes, and funding. This seminar will discuss these issues and provide examples of recent projects related to biofuel policy and commodity programs in the next Farm Bill.