Fuel Smarts

ATA Challenges California Low-Carbon Fuel Standard

February 02, 2010

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The American Trucking Associations has joined petroleum refiners and other end-users in a legal challenge to California's recently enacted low-carbon fuel standard.


The new standard will count all the emissions required to deliver gasoline and diesel to California consumers, reports the Associated Press, including activities such as drilling new oil wells, planting corn, and delivering fuel to retail locations. The regulation requires providers, refiners, importers and blenders to ensure that the fuels they provide for the California market meet an average declining standard of "carbon intensity."

The regulation requires annual reductions in the carbon intensity of gasoline and diesel over the next ten years. The regulation falls directly upon fuel providers (refiners, importers and blenders of fuel), but will impact end-users because of associated fuel price increases.

The legal challenge is largely based on the Commerce Clause with assertions that the "shuffling" of low-carbon fuel to California and away from other states will significantly burden fuel providers and consumers without any net change in fuel's carbon-intensity on a global scale, resulting in no reduction (and a likely increase) in greenhouse gas emissions.

"The LCFS would essentially ban imports to California of fuels derived from unconventional sources such as oil sands from Canada, oil shale from the Western U.S., or domestic coal supplies that can be converted into transportation fuels," said ATA Vice President Rich Moskowitz. "Discouraging these fuels will simply increase costs while failing to prevent their export to and consumption by other nations."

The complaint, filed Tuesday in U.S. District Court in California, also challenges the regulatory scheme as discriminating in favor of California-produced fuels by assigning them lower carbon-intensity ratings because of shorter transportation distances to users.

MORE INFO:

"CARB Adopts Low-Carbon Fuel Standard," Truckinginfo.com, 4/24/2009

California Energy Commission's low carbon fuel standard web page: www.energy.ca.gov/low_carbon_fuel_standard/

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