Oil refiners and truckers target California’s global warming initiative

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First the auto companies took on California’s landmark 2002 law to slash the greenhouse gases spewing from vehicle tailpipes. They lost in court, and today California’s rules to make cars and trucks more fuel efficient are being incorporated into a national standard.

Now oil refiners, petrochemical companies and trucking companies are attacking another key element in the state’s effort to control its impact on global warming: the world’s first standard to control the carbon intensity of vehicle fuels. Industry trade associations filed suit in U.S. District Court in Fresno Tuesday to void the state’s low-carbon fuel initiative, aimed at slashing by 10% greenhouse gas emissions from gasoline and diesel sold in the nation’s largest transportation market. The standard, which took effect last month, is designed to spur the development of alternative fuels and technology.

‘Auto companies spent five years on a lawsuit and in denial that they could meet California standards,’ said Roland Hwang, a transportation specialist with the Natural Resources Defense Council. ‘That was money, energy, and time that would have been much better spent figuring out how to make clean cars rather than fighting our laws. When price spikes and the Great Recession hit, Detroit especially was unprepared. If they had more fuel-efficient, clean cars in their lineup, they may have staved off bankruptcy.

‘The oil industry needs to prepare for the day when they’ll have real competition,’ he added. ‘California’s low carbon fuel standard gives them a clear road map to the future, but they apparently would rather be looking in their rear-view mirror.’

The lawsuit portrays the rules as discriminating “against transportation fuels and fuel feed stocks imported from outside of California with the intended effect of promoting in-state production of transportation fuels and keeping consumer dollars local...” Thus, it contends, the rules are an unconstitutional interference with interstate commerce. The California fuel standard, said Michael Whatley, vice-president of the industry group Consumer Energy Alliance, one of the plaintiffs, ‘is an example of parochial protectionism run amok.’

Under the rules, the California Air Resources board compares the amount of greenhouse gas produced by fuels from numerous sources. They assign a high carbon content to Canadian fuel extracted from tar sands, an energy-intensive process. And they attribute a high content to Midwestern ethanol produced from corn, calculating that planting corn for energy would displace crops and result in emissions from land-use changes.

Charles T. Drevna, president of the National Petrochemical & Refiners Assn., another plaintiff, said that displacing those fuels, ‘would ... increase our reliance on energy from less stable parts of the world, and weaken our national security.” In December, the ethanol industry filed suit against the regulations using similar arguments.

More than a dozen states and the federal government are also considering low-carbon fuel initiatives.
Mary D. Nichols, chairwoman of the state’s Air Resources Board called the lawsuit “shameful,” adding that the carbon standard will “help us break our dependence on fossil fuels. It will protect us from volatile oil prices.... Instead of fighting us in court, they should be working to provide consumers with the next generation of cleaner fuels.”

Bonnie Holmes-Gen, policy director for the American Lung Assn. of California, said the low-carbon fuel standard “is good for public health” because it seeks to replace high-polluting gasoline and diesel, which are linked to cancer, heart and lung diseases. ‘This regulation is the pathway to promoting alternative and zero-emission fuels including hydrogen, electriicty produced from renewable resources and advanced biofuels like cellulosic ethanol--not corn-based ethanol,’ she said.

Air board officials said they do not expect the court to delay the implementation of the low-carbon rules while the suit continues.

-- Margot Roosevelt