Fuel Industry Incites Fear of CA's Low Carbon Fuel Standard

"You think 50 cents in one week is bad - wait till the state adopts the Low Carbon Fuel Standard", warns one critic, predicting increases three times as much. The regulation was devised by the CA Air Resources Board to reduce greenhouse gas emissions

October 16, 2012, 1:00 PM PDT

By Irvin Dawid

Energy reporter David Baker writes on the business opposition facing California's Low Carbon Fuel Standard (LCFS) "which is designed to cut the greenhouse gas emissions that come from making and burning fuel. Created in 2007, the standard forces fuel producers to lower the "carbon intensity" of their products 10 percent by 2020."

The regulation is under appeal by the Air Resources Board after being blocked 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 U.S. Ninth Circuit Court of Appeals will hear arguments on the case on Oct. 16."

The LCFS stems from California's landmark climate change law, AB 32, that industry attempted to retract with Proposition 23 in 2010, and former Governor Arnold Schwarzenegger's Executive Order S-01-07.

The regulation was blocked because the judge ruled that "the policy interfered with interstate commerce and favored California biofuel producers over their Midwestern competitors. The California Air Resources Board challenged the ruling, and the U.S. Ninth Circuit Court of Appeals will hear arguments on the case on Oct. 16."

"The fuel price increases are going to make last week look like nothing," warned Robert Sturtz, chairman of Fueling California, a coalition of companies that buy large amounts of fuel.

"You'll be writing articles not about 50-cent increases in a week, but $1.50 increases in a week," he said. "That's what we're trying to avoid."

"It's the consensus of the (fuel) industry that this is going to be a train wreck," said Jay McKeeman, vice president of government relations at the California Independent Oil Marketers Association."

Taking aim at those assertions is the Environmental Defense Fund nonprofit group.

"A policy like this, that's aimed at diversifying the fuel mix, can help shield against those price swings," said Timothy O'Connor, director of the California Climate Initiative at EDF.

As the Low Carbon Fuel Standard Video on the ARB webpage indicates, "California relies on petroleum fuels for 96% of its transportation needs". The LCFS is designed to lower that percentage as well as reduce the "40% of the state's greenhouse gas emissions that come from the state's 30 million vehicles."

Saturday, October 13, 2012 in San Francisco Chronicle

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