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Important California Low Carbon Fuel Standard Development

Important California Low Carbon Fuel Standard Development

Readers may recall that the United States Environmental Protection Agency (EPA) granted California unique authority under the federal Clean Air Act to adopt emissions standards, which resulted in the state developing a Low Carbon Fuel Standard (LCFS). The California LCFS program was created under the direction of the California Air Resources Board (CARB). The LCFS requires a 10% reduction in the carbon intensity of gasoline and diesel sold in California by the year 2020. In theory, the program is aimed at reducing greenhouse gas emissions from mobile sources in the state.

When CARB adopted the regulation in 2009, it sparked the development of similar standards and programs in many states, including Oregon and Washington. Here in Oregon, the Department of Environmental Quality (DEQ) is considering the adoption of a LCFS modeled directly after California’s. However, on December 29, 2011 the District Court in Fresno, California ruled the state’s LCFS program is a violation of the U.S. Constitution’s Commerce Clause by discriminating against out-of-state fuel and biofuel producers. Upon this ruling, the California LCFS immediately became unenforceable and we are seeing states such as Maine and Washington suspending their own LCFS programs.

LCFS programs developed and implemented in other states are even more vulnerable to legal challenge than California, since California was the sole state to be given authority to create this type of greenhouse gas emissions control. It is also important to note the economic impact an LCFS program could have. The standard regulates fuel production, but cannot guarantee fuel availability, which will be drastically cut down if other states begin to adopt their own LCFS. The lack of availability of acceptable fuel blends would likely increase the cost of fuel dramatically in California and Oregon.

The California court ruling is a monumental development. Given the LCFS’s constitutional violation and the potential economic impact, it is extremely important for Oregon DEQ to follow the lead of states like Washington and suspend their LCFS program. AGC is part of a coalition working to inform DEQ and legislators of the LCFS’s real effect on the state and to strongly encourage DEQ to end development of a LCFS program.

If you have questions or would like to find out more about AGC and their involvement with Oregon’s LCFS program, please contact Allison Koenker.

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