CARB adopts low-carbon fuel standard

California’s Air Resources Board, the most stringent air-quality enforcer in the nation, approved a landmark rule Thursday evening to cut greenhouse gases from gasoline and diesel fuels through 2020. The sweeping regulation targets the carbon emissions resulting from the production and distribution of alternative fuels, including ethanol, and potentially affects the way land is used to grow fuel crops, such as corn.

Before the board’s vote, ARB 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 issued by Republican Gov. Arnold Schwarzenegger seeking a reduction in climate-changing greenhouse gases.

The regulation applies to California, but environmentalists and most ARB members believe the rule will prompt a corresponding rule at the federal level. The state rule – Gov. Schwarzenegger described it Thursday as a “first in the world” regulation — requires the carbon component of fuels to be reduced by 10 percent during the next 11 years. The goal is to eliminate 16 million metric tons of carbon emissions from the air over the next decade.

Opponents included the ethanol industry, fuel producers and business interests who said the rule could cost $3.7 billion annually to put into effect. Moments before the final vote, members of the ARB acknowledged that they had been lobbied heavily by partisans in the LCFS debate, including ethanol industry advocates, scientists, environmentalists and others.

The dramatic new regulation – dramatic even in the context of rules adopted by the  ARB governing greenhouse gases that have captured international attention — would curb fuels’  carbon emissions from their inception to their combustion. Nichols described the new regulation as a “cradle-to-grave” approach to curb greenhouse gases.

That means that the greenhouse gas content of every aspect of fuel – its production, distribution and combustion — is taken into account. For example, the emissions from machinery harvesting corn, the trucks transporting the crop, the processing plants, the transport of the fuel, the burning in an engine – all would be considered. Also considered would be the emissions associated with fuel-crop production.

"The new standard means we can begin to break our century-old dependence on petroleum and provide California with greater energy security," Nichols said earlier. "The drive to force the market toward greater use of alternative fuels will be a boon to the state's economy and public health – it reduces air pollution, creates new jobs and continues California's leadership in the fight against global warming."

Late Thursday, Gov. Arnold Schwarzenegger hailed the adoption of the rule.

"California’s first-in-the-world Low Carbon Fuel Standard will not only reduce global warming pollution – it will reward innovation, expand consumer choice and encourage the private investment we need to transform our energy infrastructure," the governor said in a statement. "Embraced already by 16 states and with support from President Obama and members of Congress for a national standard, we are on the path toward energy security and a low carbon future.”

Not everyone was so positive.

Industry critics questioned whether the new rule really would provide economic benefits, and the lone dissenter in the voice vote of the ARB was deeply skeptical and wondered whether the rule was an intemperate leap into the unknown.

“We shouldn’t pass anything that will make anybody’s life worse in the state of California,” said ARB member John G. Telles, a cardiologist and Schwarzenegger appointee. “I have a lot of concerns that are not addressed.”

“I’ve spent the last 30 years reading scientific documents, and I find this (the ARB staff analysis) extremely difficult to read,” Telles added.

The regulation is the latest in a string of directives from the ARB targeting climate-changing greenhouse gases from automobiles, factories and the fuel production itself. The ARB, in its quest to cut carbon emissions that contribute to global warming, also has approved landmark rules governing on-road and off-road diesel equipment and ships in port, among others.

“Transportation accounts for 40 percent of California’s annual greenhouse gas emissions, and we rely on petroleum-based fuels for an overwhelming 96 percent of our transportation needs,” Gov. Schwarzenegger said when he issued the executive order.

According to the state, the LCFS will result in the replacement of 20 percent of on-road gasoline consumption with lower-carbon fuels, triple the size of the state’s renewable fuels market and place more than 7 million alternative fuel or hybrid vehicles on California’s roads – a 20-fold increase over today’s number of vehicular hybrids.

Because it has an impact on how fuel crops, such as corn, are grown and harvested, the LCFS affects land-use decisions as well – a sore point with LCFS critics, led by business interests. Critics, including a critique by 135 scientists, believe the regulation may be based on inadequate research and pop science. It would encourage the development of alternative fuels, including some biofuels, hydrogen and electricity, and require conventional fuel producers to track – and reduce – the carbon in their products.

“I think people would be of a different mind set if they felt that the ARB had taken a clear look at what this is really going to mean,” said Shelly Sullivan, executive director of the AB 32 Implementation Group, a business coalition that has opposed a number of California’s greenhouse gas regulations. A key part of the debate is the criticism of ethanol producers. Ethanol is a pure alcohol that in California and others states has been used as an additive to gasoline to cut down pollutants.

Nichols said Thursday that state air-quality officials would closely monitor the new regulation as its impacts take effect, and tweak it if necessary.

Environmentalists note that while ethanol is clean-burning when measured at the tailpipe, the production and distribution of ethanol entails emissions of climate-changing greenhouse gases. That means regulators must consider Nichols’ “cradle-to-grave life cycle” of fuels, including ethanol, and other biofuels, in order to assess their true impact on the atmosphere.

Others are dubious.

Sullivan said the $3.7 billion impact was derived from a per-gallon estimate of 21 cents for gasoline and 12 cents for diesel, with about 14.7 billion gallons of gasoline and 5.4 billion gallons of diesel consumed annually. Those figures should have been considered by the ARB before approving the LCFS rule, she contended

But air-quality advocates said greenhouse gases must be considered in a global context.

“The key focus here is that we need to pay attention to the carbon emissions and air-quality emissions of the entire cycle. We can’t just say biofuels are good, we have to say what kind of biofuels are good. The data shows that if we want to achieve real greenhouse gas emissions, we should be looking at cellulosic grass, rice straw, not crop-based fuels,”  Bonnie Holmes-Gen of the American Lung Association, said earlier. “We have to look at the pathway of the fuel – is it from a waste crop or is it from corn?”

For environmentalists and state regulators, that difference is crucial: If a fuel, such as ethanol, springs from corn, the carbon emissions associated with producing tha
t corn – the fuel for the harvesting equipment, the fertilizer, the fuel used to generate the power for a farm, for example – must be included. The carbon emissions from a waste crop – wood chips, for example – presumably would be less.