Wednesday, February 11, 2009

AB 32 and Gasoline Consumption by 2020

One goal of California's Global Warming Solutions Act of 2006, aka AB 32, is to reduce greenhouse gases, GHGs, to 1990 levels by 2020. In the automotive sector, this is not difficult to pin down, as gasoline usage data are available through EIA (Energy Information Agency).

But, what will it take in practice to achieve this goal? What type of new-car miles per gallon will be required, and what ratio of new cars to existing cars? Put more simply, how many new cars per year must be sold, and what will their mpg be? I put some thought into this, along with my trusty spreadsheet. If others see where this is in error, please leave a comment and correct me.

Another factor is how many older cars are retired each year, and what is the average mpg for those retired cars?

We start with the basics, how many cars are on the road in California. This seems like a zillion, but it really is about 30 million in 2008. Roughly 8 cars for every 10 Californians. Gasoline production and consumption is about 42 million gallons per day in 2008, and at 12,000 miles driven per year per car, that works out to about 22 miles per gallon on average. Hybrid-type cars get a lot better than that, but some older cars are getting around 16.   For 1990, California gasoline demand was approximately 29 million gallons per day. 

If population grows at around 2 percent per year, and the cars/person ratio holds, then we will have roughly 38 million cars on the road in 2020. If each car continues to drive an average of 12,000 miles per year in 2020, then the fleet of cars must achieve an average of 42 mpg by 2020 to reduce gasoline consumption back to 1990 levels. Is this even possible? What is required?

If the state adds new cars at the rate of 10 percent per year of total cars on the road, and retires roughly 7 percent of the cars each year, this could work. But, the average mpg of all new cars sold must be 42 mpg from now until 2020. Is that possible? Even if cars are offered for sale with that mpg, will consumers buy them?

Another part of AB 32 is the Low Carbon Fuel Standard, which requires transportation fuels to include 10 percent renewable fuel -- bio-fuel. The above analysis with 42 mpg average for new cars includes the 10 percent bio-fuel.

There are a lot of SUVs sold in California, or at least, there were before June 2008 when gasoline prices spiked then a few months later the economic crisis struck and nobody is buying cars, or at least it seems that way. I suspect that few of the SUV's will achieve 42 mpg off the showroom floor, so there had better be a lot of hybrids sold at 50 to 75 mpg to make up the difference. In reality, the only 2009 cars that achieve 42 mpg or better are the Honda Civic, Volkswagen Jetta, and Toyota Prius.

For reference, here is a list of some SUV offerings for the 2009 model year, with city/highway mpg:

Ford Escape Hybrid FWD automatic 34/31  (city/highway mpg)
Mazda Tribute Hybrid 2WD automatic 34/31
Mercury Mariner Hybrid FWD automatic 34/31
Jeep Compass 2WD manual 23/28
Jeep Compass 4WD manual 23/28
Jeep Patriot 2WD manual 23/28
Jeep Patriot 4WD manual 23/28

In short, it appears that there is no way that the population can grow 2 percent per year, people can drive 12,000 miles per year, purchase 10 percent new cars every year, retire 7 percent of the vehicle fleet each year, and meet the AB 32 goal of 1990 fuel consumption by 2020. No way, at least that is how it appears to me.

Now, to put on my optimist's hat: Some gas-sipping vehicles are about to be introduced. If AFSTrinity can get moving, their cars and SUVs will achieve better than 100 mpg, but most of that is due to electric power from plug-in hybrid. The Chinese-built BYD plug-in hybrid car is supposed to get better than 170 miles per battery charge, which will effectively mean zero gasoline usage for many months for the average driver. But, these cars are not yet in showroom floors.

I plan to analyze other parts of AB 32 in the next few days and weeks. So far, the gasoline plan looks doomed. I wonder if there is a Plan B?


I was informed by one of my sons that my analysis was full of errors.  He had run the numbers, and offered these comments:  First, the 1990 gasoline consumption was not in my first effort, and it should be.  That number is now in place above, at 29 million gallons per day.  Second, the average car's mpg must therefore be increased to 42 mpg, not 35 as originally stated.  That correction is now in place, also.  This makes the problem much worse, as there are even fewer cars around that achieve 42 mpg.  

His third point, and a most excellent one, is that automobile companies do not make enough cars for California to purchase 3 million cars per year.  It turns out that in a good year, only about 15 to 17 million new cars and light trucks are sold in the U.S.  Fewer than that were sold in 2008, but that is an unusual year due to high gasoline prices and the economic crisis.  

Therefore, the fleet turnover in California will not be completed in 12 years, but will take much longer, perhaps 15 to 18 years, depending on how many new cars/trucks are actually sold each year.   Therefore, we must either greatly increase the new-car mpg, or drive much less per vehicle to achieve the gasoline reduction targets required.  Neither of those seems likely, as explained above.  

The conclusion remains valid, that there is no way the reduction in gasoline consumption to 1990 levels will occur by 2020. 

However, there is another aspect to all this.  Under AB 32, the Pavley standards require 43 mpg by 2016, and 49 mpg by 2020.   Pavley standards are the California alternative to the federal CAFE mileage standards, designed to cut CO2 from the California skies.  These are not yet law, pending a ruling from the federal EPA.  With Obama as president, a favorable ruling is expected any day now. 

The key point is that CAFE standards, and the Pavley standards, apply to NEW car sales, not to existing fleet on the road.  Therefore, it is impossible to achieve the 1990 gasoline consumption by 2020, as there is a graduated or sliding scale of increased mpg for each year between 2008 and 2020.  The above analysis was based on having the high-mpg cars available in 2009 and every year after that.  Clearly, that is impossible. 

The implications for this are large.  For one, refineries will be required to sell gasoline to meet the demand, so by 2020 they will likely be selling much more gasoline than the 29 million gallons per day sold in 1990.  Will the state penalize them for excessive energy consumption as they run their processes to churn out that much gasoline?   This will be addressed more fully in the post dedicated to the Industry sector.

The more one digs into the AB 32, Global Warming Solutions Act of 2006, the more problems surface. 

Addendum II Feb 14, 2009 

The Pavley standard is to reduce CO2 by 31.7 million Tonnes CO2 per year by 2020.  Using the EPA figure of 19.4 lbs CO2 produced for each gallon of gasoline burned (which is not a bad number, I checked it using average carbon-number for gasoline of 9), the gasoline reduction works out to just over 20 percent from the Business-As-Usual case.  It does not achieve a reduction to 1990 levels, but would achieve a reduction to 2008 levels of gasoline consumption.  

Therefore, as before, it is shown that transportation fuels do not reach 1990 levels.  Other segments of CO2 producers must therefore step up their contribution.  Which will it be: Industry, Power Generation, Commericial Buildings, Residential Buildings, Agriculture, Forestry, or Other?

Roger E. Sowell, Esq. may be contacted via his  website here.

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