Here's her testimony in full:
Good afternoon Mr. Chair and Committee Members.
I’m Jeanne McCaherty, the CEO for Guardian Energy Management. I oversee the operations of three ethanol plants with a combined annual production capacity of about 370 million gallons, including the Janesville facility in Southern MN.
In my other roles I serve as the Board Chair for the Renewable Fuels Association, a national trade group of ethanol producers. I also serve on the board of a regional ethanol marketing group (RPMG), and that of the Minnesota Bio-Fuels Association.
For the last couple of years, I have actively participated in a series of stakeholder discussions focused on the development of policy initiatives that can help solve emerging societal challenges by capitalizing on our region’s unique and abundant resources.
Specifically, we have discussed strategies that can harness the power of our region’s rich agricultural, forestry, and energy resources to reduce transportation-related greenhouse gas emissions, cut harmful tailpipe pollution, boost economic activity, and increase our region’s energy self-reliance.
Through these discussions, our diverse group of stakeholders determined that a Clean Fuels Policy—or CFP for short – offers tremendous potential and promise for addressing the environmental and economic challenges related to producing and consuming transportation fuels. In essence, a well-structured CFP sets carbon reduction targets and creates economic signals that increase the production and use of cleaner, lower-carbon, renewable transportation fuels. Under a CFP, transportation fuel providers are discouraged from supplying high-carbon fuels to the marketplace and rewarded for continuously reducing the carbon intensity of the fuels they supply.
Our group of stakeholders, which includes leaders from the agricultural and energy communities as well as environmental groups here in Minnesota, developed a set of guiding principles and key considerations for the development of a state or regional CFP. We believe a Minnesota program should play to our state’s strengths and avoid the problems associated with other existing state CFP programs. We were pleased to see that our vision of a CFP was included in a set of policy recommendations from the Governor’s Council on Biofuels, on which I served. Now, that CFP policy proposal is embedded in the Future Fuels Act, a part of this omnibus bill.
The Future Fuels Act can be a great win for Minnesota. Here’s why I am asking you to support it. The Future Fuels Act is a fuel, technology, and vehicle-neutral program. It does not dictate or mandate the use of certain fuels or vehicles. Rather, it establishes targets for reducing the carbon intensity of fuels consumed in Minnesota, then lets the marketplace determine the most efficient and cost-effective strategies for achieving those carbon reductions. A CFP creates market-based incentives for the entire fuel supply chain to continuously lower the carbon intensity of the fuel. In the case of renewable liquid fuels like ethanol, farmers can share in the benefits of these incentives by adopting climate-smart practices that reduce the carbon intensity of the biomass used to make renewable fuels.
With technology that is known today, ethanol could be carbon neutral or negative. This means that with every gallon of liquid fuel burned in MN, we could actually be removing GHG from our air. Imagine this. Whether or not you are a supporter of Biofuels, this kind of “neutral” program will act to reduce the climate impact of our transportation sector.
We don’t have oil wells in Minnesota, but we have plenty of renewable biomass and production technology to convert that biomass into fuel that can be used right here in Minnesota. Market forces are very efficient. If we set aspirational goals and allow the program to be guided by science and innovation, our private sector will deliver. This program is not a government mandate or a tax but rather describes the climate goals we desire and allows the market to innovate and deliver solutions.
Because all transportation fuels are assigned unique carbon intensity “scores” under a CFP, the lifecycle analysis methods used to derive these scores is crucially important. The Future Fuels Act will use the most recent version of the “Greenhouse gases, Regulated Emissions, and Energy use in Technologies,” or GREET model, from the Department of Energy’s Argonne National Laboratory, to determine the carbon intensity of transportation fuels. DOE’s GREET model is considered the “gold standard” for lifecycle analysis worldwide.
The FFA would recognize and support emission benefits from a variety of MN produced clean fuels, including ethanol, biodiesel, fuels from wood, and other emerging opportunities. In Janesville today we produce cellulosic ethanol which has nearly half of the carbon intensity of starch-based ethanol. These gallons are currently being shipped out of the region because CFP programs in other states like California have created pull demand for these lowest-carbon fuels. California wins by burning the lowest carbon-intense fuels and MN loses the opportunity to keep this commerce and environmental benefit in our own state.
MN is in a prime position to lead this kind of CFP program. The Midwest leaders from other states are watching MN. We have always been a leader in climate policy and this is an opportunity to again set the standard.
For all these reasons, I respectfully ask that you support the Future Fuels Act and look forward to answering your questions.
Thank you
