Calif. considers low-carbon fuel standard

SACRAMENTO " California air regulators are taking another step to reduce greenhouse gas emissions, considering first-in-the nation standards to require the use of so-called low-carbon fuels.

The California Air Resources Board, which will debate the standards Thursday, considers the regulation a framework for a potential national policy advocated by President Barack Obama on the campaign trail last year. Democrats have included a goal for low-carbon fuels in the latest climate bill they have introduced in Congress.

"We see this as a model for the rest of the country and the world to follow," said Air Resources Board member Dan Sperling, a transportation expert and professor at the University of California, Davis.

The proposed regulation calls for reducing the carbon content in California's transportation fuels 10 percent by 2020, but representatives of the petroleum and ethanol industries are objecting to how the state proposes to achieve that.

California oil producers and refiners are skeptical that cleaner fuels and vehicles powered by hydrogen and natural gas will be available in time to meet the new standards. They are asking the Air Resources Board to delay a decision until next year.

"This is the most transforming fuel regulation we've ever done," said Kathy Rehis-Boyd, executive vice president of the Western States Petroleum Association. "We think there's still more homework to do on this. There's a lot of uncertainty."

The low-carbon fuel standard is part of California's drive to reduce its emissions of heat-trapping gasses by roughly a third by 2020. Transportation accounts for 40 percent of the state's emissions.

Two years ago, Gov. Arnold Schwarzenegger directed air regulators to develop a rule that would help boost the amount of renewable fuels available to California motorists, truck drivers, recreational boaters and in-state train operators.

Ocean-going ships, interstate locomotives, aircraft and military tactical vehicles are exempt from the rule.

The goal is to allow petroleum refiners, fuel blenders and distributors to decide how to gradually reduce the carbon emissions of their fuels beginning in 2011, rather than having the state tell them which fuel to use.

"We have a long history of what I call 'fuel du jour' approaches," Sperling said. "What we need is a broad policy framework that doesn't pick winners."

The Air Resources Board is not just targeting the emissions of the fuel once it is burned in a vehicle. It also wants to account for all carbon emissions related to the production of the fuel.

For example, refineries could choose to stop buying a heavy crude oil extracted from Canadian oil sands, which takes more energy to convert into gasoline. But accounting for emissions during the entire production cycle of a fuel also would discourage certain fuels from being used in California.

Corn-based ethanol, for example, burns cleanly in a car engine. But making it can take a heavy toll on the environment: Massive tracts of land must be cleared, which requires fuel-powered tractors, then coal- or natural gas-fired plants convert the corn into fuel and petroleum is used to transport the end product to distant markets.

The air board also wants to hold ethanol producers accountable for actions taken in other countries.

Board scientists say that U.S. policies subsidizing corn-based ethanol have caused deforestation in the Amazon. According to the environmental group Rainforest Action Network, Brazil has expanded its soybean production to make up for a drop in soybeans from American farmers, who have been planting corn for biofuels instead.

The deforestation to create soybean fields results in a massive release of greenhouse gases, typically when the trees are burned and soil is tilled for crops. The California air board wants to consider those effects " anywhere in the world " if they are related to the production of biofuels in the U.S., even indirectly.

When all that is factored into the air board's economic models, ethanol produced from Midwest corn in a coal-fired plant actually rates as a dirtier fuel than gasoline.

Under that scenario, California's proposed low-carbon fuel standard threatens to shut off one of the ethanol industry's largest markets.

"It's a total shell game. There's no way you can prove that growing corn in Iowa has anything to do with destroying the Amazon forest in Brazil," said Tom Koehler, a policy adviser at Pacific Ethanol. "You cannot connect the dots with a straight face."

Roger Salazar, a Sacramento political consultant representing the ethanol industry, said the industry has become much more efficient in its crop production. U.S. corn yields have doubled, in part to accommodate the ethanol market, over the past 10 years while farm acreage has remained constant, he said.

The board's attempt to estimate emissions from such indirect land use has sparked debate in California and elsewhere.

More than 100 scientists " including those from the National Academy of Engineering, Sandia National Laboratories and a host of universities " petitioned the California Air Resources Board to rethink its position.

They said regulators are acting prematurely because scientists remain divided over how best to calculate carbon emissions tied to biofuels. They also criticized the board for penalizing biofuels by not applying the same standard to oil and natural gas production, although the air board does factor in the emissions tied to drilling, transporting and refining oil and gas.

"That creates a bias in the system that should not be there in something as impactful and important," said Blake Simmons, a chemical engineer at Sandia National Laboratories who signed the letter.

Cellulosic ethanol, which is produced from wood, grasses and plants, and next-generation biofuels, including those made from municipal waste, would fare better under the California standard. Their carbon emissions are projected to be much lower than corn-based ethanol.

Biofuel firms and oil and gas producers differ over whether such alternatives will be ready for a mass market in time to meet California's low-carbon fuel standard. A California startup, Fulcrum BioEnergy Inc., is scheduled to begin construction next year on a plant in Reno, Nev., that makes ethanol from garbage.


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