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Tuesday, January 31, 2012

California fuels rule sparks controversy

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California fuels rule sparks controversy

Text SizePrintE-mailReprints By Juliet Eilperin,

Just as it pioneered curbs on greenhouse gas emissions from cars and light trucks a decade ago, California is championing standards that could transform the fuel that goes into their tanks.

But its new rule, which requires lowering the amount of carbon in fuel sold in the state, has become embroiled in a fierce public battle and has been barred from being enforced. In light of tight state budgets, litigation over California’s program and a strong lobbying campaign against them, the question is whether the ambitious climate policy will get off the ground.

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“To us, it’s the most credible and powerful mechanism we can put in place,” said Dan Sperling, a member of California’s Air Resources Board and director of the Institute of Transportation Studies at University of California-Davis. “It’s an incentive to invest in other things besides oil.”

Many oil industry officials in the United States and overseas say the standards are too complex, will drive up gas prices and cannot be met given the current supply of petroleum alternatives.

Charles T. Drevna, president of the American Fuel and Petrochemical Manufacturers, said the policy “sounds really good at the 30,000-foot level” but added, “When you get down to terra firma, it’s a giant energy tax and a fuel rationing scheme.”

The premise of California’s rule — as well as its European counterpart, the “E.U. Fuel Quality Directive” — is that goals for cutting greenhouse gases can only be met if the transportation sector begins to move away from fossil fuels.

The new standards assign carbon intensity values to roughly 250 types of crude (higher carbon) along with other fuels — including ethanol, electricity and hydrogen, all lower carbon— that power cars and trucks.

They call for reducing the overall carbon content of fuel sold in the state 10 percent by 2020. Refiners will either have to mix low-carbon fuels into what they sell over time in order to make the required cuts or buy credits to offset the amount by which the fuel they sell exceeds the standards.

The state projects that the standard would reduce greenhouse gas emissions by 23 million tons in 2020, according to Simon Mui, a scientist at the advocacy group Natural Resources Defense Council.

Lawmakers in at least 18 other states, as well as in Washington, started looking at adopting similar clean-air standards over the past few years as a way of cutting greenhouse gas emissions both regionally and nationwide. But now several have either dropped or suspended their plans. Pennsylvania and New Jersey have opted out of a program developed by Northeast States for Coordinated Air Use Management. Maine announced late last month it will withdraw, and New Hampshire’s legislature is considering legislation that would bar the state from spending money on the initiative. Low-carbon fuel standards in Washington state and Oregon are also on hold.

The Midwestern Governors Association abandoned its proposal after its membership flipped last year from seven Democrats and three Republicans to three Democrats and seven Republicans.

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