Reuters writes that in rejecting the constitutional argument presented by the plaintiffs who "include farmers growing crops to make ethanol, the California Dairy Campaign, the Renewable Fuels Association, and a fuel and petrochemical association", the court could be "laying the groundwork for a potential Supreme Court fight" should the plaintiffs appeal.
"Out-of-state fuel producers argue that it discriminates against their products, favoring California-produced fuels, which are not transported as far", according to Reuters. The judge didn't agree. The San Francisco Chronicle's Bob Egelko reports that "the court ruled 2-1 that the fuel standard is non-discriminatory and is based on fuels' overall emissions, not their place of origin." "The fuel standard does not base its treatment on a fuel's origin but on its carbon intensity," Judge Ronald Gould said in the majority opinion.
He said the state had made a "reasonable decision" to take into account the average cost, in emissions, of shipping fuel into California. The federal government could enact similar measures nationwide, Gould said, but instead has passed laws allowing California to take the lead.
As we noted last October, the regulation was under appeal by the California Air Resources Board after being blocked (PDF) by a federal judge on December 29, 2011 because '"the policy interfered with interstate commerce and favored California biofuel producers over their Midwestern competitors."
The Low Carbon Fuel Standard (LCFS) is not a law though it is found in the scoping plan of California's landmark climate law, AB 32. The controversial standard results from former Gov. Arnold Schwarzenegger's Executive Order S-1-07, issued on January 18, 2007), and "calls for a reduction of at least 10 percent in the carbon intensity of California's transportation fuels by 2020." We have covered its saga since it was approved by CARB in April, 2009.
Another opponent, though not a plaintiff, is the powerful Western States Petroleum Association. Catherine Reheis-Boyd, its president, indicated her displeasure with the ruling. "(W)e have been very vocal in our view that the LCFS is proving to be an infeasible and extremely costly regulation," she said in a statement.
On the opposite side is the Environmental Defense Fund. "This is a resounding win for the environment," said Tim O'Connor, Director of EDF's California Climate and Energy Initiative in the San Francisco office, "who believes the case is likely to be appealed to the U.S. Supreme Court", writes Reuters.
California is the only state with such a program. The Oregon "(l)egislature adopted the clean fuel program in 2009, but the Department of Environmental Quality has yet to implement it", wrote The Oregonian's Scott Learn in June about a bill to extend the program that ultimately failed to pass the state Senate on July 6.