slide 1 Tim Stearns- Washington CTED Energy Policy Division

Policy puzzle for Policy puzzle for oil usageoil usage

Plan better –live/workMass transit - integrateInfrastructure – multimodal

seemlessTransportation choices – walk, bike, drive, transitImprove vehiclesBetter fuelsPricing – send clear signals

slide 2 Tim Stearns- Washington CTED Energy Policy Division

contextcontext 1.2 billion gallons distillate fuels use in WA1.2 billion gallons distillate fuels use in WA 4b gallon of gasoline per year4b gallon of gasoline per year Growing world demand for oil – 70 mbdGrowing world demand for oil – 70 mbd 3 gallons per day per person US – 20 mbd3 gallons per day per person US – 20 mbd Oil Supply peaking – new price levelOil Supply peaking – new price level Demand will double in 50 yearsDemand will double in 50 years Large pollution challenge – air & waterLarge pollution challenge – air & water Diversify rural economiesDiversify rural economies All imported to stateAll imported to state

slide 3 Tim Stearns- Washington CTED Energy Policy Division

Washington State Washington State PolicyPolicy

Lead with government usageLead with government usage Clear permitting pathClear permitting path Coordinate agenciesCoordinate agencies Improve financing climate – public/privateImprove financing climate – public/private Can’t control markets for ag or oilCan’t control markets for ag or oil Can’t control farmers or entrepreneurs or fedsCan’t control farmers or entrepreneurs or feds Work with existing infrastructureWork with existing infrastructure Structure market to expand productionStructure market to expand production Quality – quality – qualityQuality – quality – quality

slide 4 Tim Stearns- Washington CTED Energy Policy Division

Keys to successKeys to success solid business plansolid business plan

– BuyersBuyers– ManufacturingManufacturing– Service Service – Management Management – marketingmarketing– Distribution channelsDistribution channels– financing – equity – debt – grantsfinancing – equity – debt – grants– partnerspartners

slide 5 Tim Stearns- Washington CTED Energy Policy Division

slide 6 Tim Stearns- Washington CTED Energy Policy Division

Federal helpFederal help

Federal blenders tax creditFederal blenders tax credit EPA support for regulatory frameworkEPA support for regulatory framework USDA guaranteed loansUSDA guaranteed loans USDA crop researchUSDA crop research Navy & GSA approval of pumps & storageNavy & GSA approval of pumps & storage Usage Usage Challenge – decentralize – support diverse Challenge – decentralize – support diverse

activitiesactivities

slide 7 Tim Stearns- Washington CTED Energy Policy Division

Why biodiesel?Why biodiesel?

Can grow feed stocks – canola & mustardCan grow feed stocks – canola & mustard Canola – feed cattleCanola – feed cattle Mustard – biofumigate potatoesMustard – biofumigate potatoes Modular size better fit for northwestModular size better fit for northwest Midwest better for corn & soybeansMidwest better for corn & soybeans Midwest way ahead on ethanolMidwest way ahead on ethanol Cellulosic ethanol still a work in progressCellulosic ethanol still a work in progress

slide 8 Tim Stearns- Washington CTED Energy Policy Division

Private - governmentPrivate - government

visionvision risks risks controlcontrol InvestmentInvestment InnovateInnovate managemanage

Clear frameworkClear framework Prevent problemsPrevent problems

– Safety - Safety - environmentalenvironmental

Create marketsCreate markets Cajole & assistCajole & assist ResearchResearch qualityquality

slide 9 Tim Stearns- Washington CTED Energy Policy Division

Pithy observationsPithy observations

Recognize oil addiction 2006 - duhRecognize oil addiction 2006 - duh Can’t wait for feds - might be goodCan’t wait for feds - might be good Avoid harm - provoke changeAvoid harm - provoke change Action - alternatives don’t just happenAction - alternatives don’t just happen Diversify ruralDiversify rural Free market is not free - $ without moralsFree market is not free - $ without morals High prices irrelevant without substitutesHigh prices irrelevant without substitutes R&D is step 1R&D is step 1

slide 10 Tim Stearns- Washington CTED Energy Policy Division

Biofuels actionBiofuels action Renewable fuel standard 2% in 2008Renewable fuel standard 2% in 2008

– Market - buyers/framers/referees Market - buyers/framers/referees State $ to attract privateState $ to attract private QualityQuality Near term researchNear term research Lead - follow - get out of the wayLead - follow - get out of the way Plug in hybrid cars & busesPlug in hybrid cars & buses Converting 9,000 school busesConverting 9,000 school buses 3 freedom highways3 freedom highways

slide 11 Tim Stearns- Washington CTED Energy Policy Division

Policy puzzle for Policy puzzle for oil usageoil usage

Plan better –live/workMass transit - integrateInfrastructure – multimodal

seemlessTransportation choices – walk, bike, drive, transitImprove vehiclesBetter fuelsPricing – send clear signals

slide 12 Tim Stearns- Washington CTED Energy Policy Division

The endThe end

We can do it – Be creative - innovateWe can do it – Be creative - innovate Have fun doing it – work togetherHave fun doing it – work together Make money doing it – Make money doing it –

– must invest – take risksmust invest – take risks Just do itJust do it

Washington State Washington State BiofuelsBiofuels

Tim StearnsTim StearnsEnergy Policy DivisionEnergy Policy Division

WA Department of WA Department of Community, Trade & Economic DevelopmentCommunity, Trade & Economic Development

206-256-6121206-256-6121tims@cted.wa.govtims@cted.wa.gov