NPRA, others sue over California low-carbon fuel standard

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Feb. 4 -- The National Petrochemical & Refiners Association and three other organizations legally challenged California’s low-carbon fuel standard on Feb. 2.

“The California LCFS is unlawful for a number of reasons, including the fact that it violates the Commerce Clause of the US Constitution by imposing undue and unconstitutional mandates on interstate commerce,” explained NPRA Pres. Charles T. Drevna.

The standard also would have little or no impact on greenhouse gas emissions nationwide and would harm US energy security by discouraging use of Canadian crude oil and ethanol produced in the US Midwest, Drevna added.

He said, “The fuel prohibited from use in California will simply be used elsewhere, which will result in increasing overall GHG emissions as a result of less-stringent environmental standards in places where those fuels would ultimately be consumed.” GHG emissions also would climb from increased transportation distances, he said.

The American Trucking Associations, the Consumer Energy Alliance, and the Center for North American Energy Security joined NPRA in the lawsuit, which was filed in US District Court for California’s Eastern District in Fresno. The complaint also said the regulatory scheme discriminates in favor of California-produced fuels by assigning them lower carbon-intensity ratings because of shorter transportation distances to end users.

Recently took effect
California Gov. Arnold Scwarzenegger called for adoption of an LCFS in the state during his 2007 State of the State address to reduce GHG emissions from transportation fuels in the state by 10% by 2020. The California Air Resources Board adopted a regulation implementing such a standard on Apr. 23, 2009, but it did not officially become effective until the state’s administrative law office approved it in January.

Proponents have said the LCFS will diversify transportation fuels in the state, boost the market for alternative-fueled vehicles, and reduce GHG emissions there by 16 million tonnes by 2020. “The drive to force the market toward greater use of alternative fuels will be a boon to the state’s economy and public health,” CARB Chairwoman Mary D. Nichols said in April. “It reduces air pollution, creates new jobs, and continues California’s leadership against global warming.”

CNAES Executive Director Thomas Corcoran noted on Feb. 2 that the standard discourages reliance on fuels derived from Canadian oil sands and other nonconventional sources. “This is a slap in the face to our Canadian allies and others who are working hard to help us attain North American energy security,” Corcoran said.

ATA Vice-Pres. Rich Moskowitz added that the LCFS also would ban imports to California over fuels derived from oil shale in the US West or domestic coal supplies, which could be converted into transportation fuels. “Discouraging these fuels will simply increase costs while failing to prevent their export to and consumption by other nations,” he said.

CEA Vice-Pres. Michael Whatley, a former chief counsel for the US Senate Clean Air and Climate Change Subcommittee, said, “Perhaps it wasn’t the state’s intent, but as written, the California LCFS is an example of parochial protectionism run amok. This isn’t the type of protectionism that will benefit California consumers. It’s the type that will ensure sources of essential energy are harder to find in the future and much more expensive to purchase.”

Contact Nick Snow at nicks@pennwell.com.

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