Fuel industry challenges California Low Carbon Fuel Standard

6 February 2010

The National Petrochemical & Refiners Association (NPRA), the American Truckers Association and two other organizations filed a legal challenge against the California Air Resources Board (ARB) regarding California’s Low Carbon Fuel Standard (LCFS).

The legal actions undertaken by this Association and other groups, said NPRA, reflect the concerns a wide variety of stakeholders have with California’s Low Carbon Fuel Standard. The California LCFS is unlawful for a number of reasons, including the fact that it violates the Commerce Clause of the United States Constitution by imposing undue and unconstitutional burdens on interstate commerce.

California’s LCFS also would have little or no impact on GHG emissions nationwide—according to NPRA—and would harm US energy security by discouraging the use of Canadian crude oil, the United States’ largest source of crude, and ethanol produced in the American Midwest. The NPRA also noted that the fuel prohibited from use in California will be used elsewhere, which will result in increasing overall GHG emissions as a result of less stringent environmental standards in places those fuels would ultimately be consumed and of increased GHG emissions from increased transportation distances.

The LCFS regulation—adopted by the ARB in April 2009—requires that fuels supplied for the California market decrease their carbon intensity by about 10% by 2020. The “carbon intensity” is established by determining the sum of greenhouse gas (GHG) emissions associated with the production, transportation and consumption of a fuel, as well as GHG emissions due to indirect land use change (ILUC) effects such as additional GHG release through the conversion of forest lands and other carbon-containing habitats. The LCFS was approved by the California Office of Administrative Law and became effective on January 12, 2010.

In response to the lawsuit Mary Nichols, ARB chairman, issued the following statement: “Their actions are shameful. This is a critical tool to help us break our dependence on fossil fuels. It will protect us from volatile oil prices and provide consumers with cleaner fuels and provide the nation with greater energy security. Our analysis shows that producing alternative fuels under this standard can save consumers as much as $11 billion over the next decade, and that's in California alone. Instead of fighting us in court, they should be working with us to provide consumers in California and the rest of the nation with the next generation of cleaner fuels.”

Source: NPRA