By Jason Dearen, September 18, 2013
SAN FRANCISCO — A panel of federal judges on Wednesday upheld
California's first-in-the-nation mandate requiring fuel producers to
reduce greenhouse gas emissions.
A three-judge panel of the 9th U.S. Circuit Court of Appeals on
Wednesday rejected arguments from fuel makers that California's "Low
Carbon Fuel Standard" discriminated against out-of-state producers.
The ruling reverses a U.S. District Court ruling in favor of
the plaintiffs, and removes an injunction that at one point halted
implementation of the law.
The California Air Resources Board, the agency in charge of
implementing the standard, appealed, and was able to continue
implementing the law while the case was being heard.
"This is a very good step for Californians and the fight against
climate change," Dave Clegern, a spokesman for the board, said in an
"We are pleased, on behalf of the people of California and its
environment, that the Court recognized the importance of this program
and that the (standard) remains in effect."
The low carbon fuel standard is a key piece of California's landmark
global warming law, AB 32, and is meant to cut the state's dependence on
petroleum by 20 percent and account for one-tenth of the state's goal
to cut greenhouse gas emissions to 1990 levels by 2020.
Charles Drevna, president of the American Fuel & Petrochemical
Manufacturers, said in a statement he was disappointed by the ruling and
that the group was considering further legal action.
"Although the LCFS is a California law," he said, "its broad reach
and intended scope means that implementing the LCFS will have adverse
consequences throughout the nation's fuel refining facilities and supply
chain far beyond California's borders."
The industry has argued that the standard will place too high a
burden on refiners and fuels makers, which will ultimately affect supply
and drive up prices at the pump.
The companies say the standard discriminates against imports by
relying on a "carbon intensity score" to determine a fuel's greenhouse
The scores measure pollution from a fuel's entire life cycle – such
as the type of electricity used to produce it or the energy used to make
it and transport it to California – not just when it is burned in a
Out-of-state refiners and ethanol companies argued that
transportation of the fuels into California alone raised their scores,
making them less competitive with in-state produced fuels. They argued
the law violated the commerce clause of the U.S. Constitution by
imposing limits on interstate commerce.
U.S. District Court Judge Lawrence O'Neill in Fresno agreed with the fuel companies and halted implementation of the new law.
But 9th Circuit Judge Ronald Gould, who wrote the opinion, said the
state's standard provided fuel makers with avenues to comply with the
requirements and get their fuels to market.
He also wrote ethanol made in-state does not ensure a lower carbon intensity score than ethanol made elsewhere.
"California ethanol produces the most transportation emissions
because California grows no corn for ethanol, so its producers import
raw corn, which is bulkier and heavier than the refined ethanol shipped
by producers in Brazil and the Midwest," Gould wrote.