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California Adopts Nation's First Low-Carbon Fuel Rule

California air pollution regulators Thursday adopted a regulation for a low-carbon fuel standard as called for two years ago in an executive order from Gov. Arnold Schwarzenegger. The standard calls for reducing greenhouse gas (GHG) emissions from the state's transportation fuels by 10% by 2020.

Schwarzenegger hailed the action as making his state "the world's first" with a low-carbon standard aimed at reversing global climate change. The governor said the regulation will "reward innovation, expand consumer choice and encourage the private investment we need to transform the energy infrastructure."

Oil and gas billionaire-turned renewable energy entrepreneur T. Boone Pickens said he is "very supportive" of the California Air Resources Board's (CARB) low-carbon standard, saying it should help "greatly reduce our dependency on foreign oil." Pickens holds business interests in diverting natural gas to fuel transportation and wind power for generating electricity.

On Friday the National Farmers Union (NFU) criticized California's action, calling it a "scientifically dubious interpretation of international indirect land-use change." NFU President Roger Johnson contended that the new rule will hurt efforts to make the United States more energy independent because CARB does not spur additional development of renewables. NFU favors more ethanol production, which Johnson said has a "proven track record for providing real green jobs."

In contrast, the Environmental Defense Fund (EDF) commended CARB and said the new rule once implemented fully "can dramatically reduce the environmental impact of transportation," said Tim O'Connor, an EDF attorney.

CARB Chairman Mary Nichols, a veteran environmental lawyer, promised that the new standard will "begin to break our century-old dependence on petroleum and provide California with greater energy security." Nichols said "the drive to force the market toward greater use of alternative fuels" will lead to major advancements for the state's economy and its public health.

CARB wants to boost the market for alternative-fuel vehicles, achieving 16 million metric tons of GHG emissions reductions by 2020, board members said. Their action was one of the most important early steps in the six-year implementation of the state's 2006 Global Warming Solutions Act, which is scheduled to be fully implemented in 2012.

CARB's analysis anticipates:

In 2007, Schwarzenegger announced the low-carbon standard for transportation, presenting it as a first-of-it-kind standard firmly establishing "sustainable demand" for lower carbon fuels without favoring one fuel over another. It directed the state to drive down GHG emissions from the transportation sector, which accounts for 40% of the state's total GHG emissions. Electric generation accounts for another 40%.

After years of butting heads with the Environmental Protection Agency (EPA) in the Bush administration over the state fuel standard, the Obama administration's EPA said earlier recently it will pursue regulation of carbon emissions, and there is increasing interest in Congress in setting a national standard (see Daily GPI, April 20).

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