California’s Air Resources Board has approved a landmark rule mandating a statewide cut in greenhouse gas emissions from transportation fuels through 2020.
The sweeping regulation targets carbon emissions from the production and burning of gasoline and alternatives such as ethanol. The rule may affect the way land is used to grow fuel crops such as corn.
Before the board’s vote, CARB Chairwoman Mary Nichols described the new regulation, known as the Low Carbon Fuel Standard or LCFS, as beyond “anything the ARB has ever done before.”
The regulation stems from a 2007 executive order by Gov. Arnold Schwarzenegger (R) seeking a reduction in allegedly climate-changing greenhouse gases. It is part of CARB’s aggressive implementation of AB 32, California’s Global Warming Solutions Act of 2006.
Motorists Will Pay
By forcing motorists away from low-cost carbon-based fuels, the new fuel standard may cost them billions of dollars per year.
Every time California has instituted stricter clean-air standards for motor fuel, “they all have had a cost associated with it,” said Catherine Reheis-Boyd, chief operating officer at the Western States Petroleum Association (WSPA), according to the April 25 Sacramento Bee. “I know there’s going to be a cost associated with this.”
Reheis-Boyd told Environment & Climate News, “WSPA does not oppose the goals of the LCFS. We opposed its adoption in its current form because the CARB Board was being asked to approve this rule before the analysis was complete on key elements of the rule, such as the carbon intensity of biodiesel fuel.
“Independent studies by Sierra Research found that the LCFS would increase fuel prices by nearly $4 billion a year,” Reheis-Boyd added. “We are pleased that the rule includes a provision for periodic review of the new fuel and vehicle technologies and other key elements going forward. The availability of adequate, reliable, and affordable fuels for consumers is essential to the ultimate success of the program.”
Ethanol Takes a Hit
A big problem, Reheis-Boyd said, is that the standards will limit the use of corn-based ethanol in gasoline, leaving refiners with a major hurdle in meeting the new standard.
The first-in-the-nation carbon standard is a key element in California’s goal of reducing its overall volume of greenhouse gas emissions by 25 percent by 2020, as required by AB 32. The LCFS standard dictates reductions in the “carbon intensity” of fuels in 2011 and ramping up to a 10 percent cut by 2020.
The board believes the standard will encourage development of hydrogen, electricity, and biofuels to power vehicles, but there is much controversy about how the standard treats what is currently the leading biofuel, ethanol made from corn. Corn ethanol is now a staple of the transportation scene, making up 6 percent of the gasoline sold in California. Its share is expected to grow to 10 percent next year.
But CARB decided corn ethanol is not so great for limiting greenhouse gases, based largely on changes in land use required for ethanol production. Eager to cash in on ethanol demand, the board reasons, farmers around the world will plow up grasslands and chop down trees to make way for corn or sugar cane, a process that releases carbon dioxide into the atmosphere.
The board’s ruling angered the corn ethanol industry, which is in severe financial distress already. Companies such as Sacramento’s Pacific Ethanol, Inc. are on the verge of bankruptcy.
The ruling also angered petroleum refiners, who say they have few viable options for meeting the 10 percent carbon reduction if they don’t get credit for using corn ethanol. The alternatives consist largely of fuel technologies that are very expensive or in the early stages of commercialization.
“We have no way to know how we’re supposed to comply with this,” Reheis-Boyd said. The only real solution, she says, is to blend in ethanol made from sugar cane, which gets a better “carbon score” from the air board.
But that means importing it from Brazil and paying costly U.S. import tariffs, Reheis-Boyd noted.
Tom Tanton [email protected]) is a senior fellow at the Pacific Research Institute.