The oil and trucking industry sued to block California's new carbon fuel regulations Tuesday, saying the rules will raise costs but do little to reduce greenhouse gas emissions.
In a lawsuit filed in U.S. District Court in Fresno, lobbyists for oil refiners, truckers and other groups charged that the state's "low carbon fuel standard" is unconstitutional.
While not as well known as AB 32, the state's landmark climate-change legislation, the fuel standard is an important element of California's attempt to fight global warming.
It's a thicket of regulations that says transportation fuels must reduce their "carbon intensity," starting next year. It not only targets the carbon content of a fuel but also examines the amount of carbon emitted to produce the fuel and haul it to its destination.
The California Air Resources Board, which adopted the standard last spring, says it will save billions of dollars by reducing oil consumption and encouraging new biofuels and electric-vehicle technologies. While the new fuels "in the beginning are going to be expensive," eventually costs will come down, said board member Dan Sperling, a professor at the University of California, Davis.
But in their lawsuit, the National Petrochemical & Refiners Association, American Trucking Associations and two other groups say the standard is a costly disaster.
One of the groups filing suit, a Washington organization called the Consumer Energy Alliance, said the regulations will increase fuel costs by $3.7 billion over the next decade. At the same time, the standard won't put a dent in the world's greenhouse gases because producers will simply ship higher-carbon fuels to places other than California, the alliance said.
What's more, the standard is unconstitutional because it penalizes fuels that are produced out of state and have to be hauled to California, said Michael Whatley, a lawyer for the alliance. The constitution forbids states from imposing tariffs or taxes on goods made in other states.
The Air Resources Board pledged to fight the lawsuit.
"Their actions are shameful," board Chairman Mary Nichols said in a statement. "Instead of fighting us in court, they should be working with us to provide consumers in California and the rest of the nation with the next generation of cleaner fuels."
It's the second big lawsuit challenging the fuel standard. Agricultural groups, including the Fresno County Farm Bureau and the Renewable Fuels Association, a national ethanol lobby, sued the state in December, also in U.S. District Court in Fresno.
Ethanol producers and corn farmers say the fuel standard will hurt them because it discourages the use of ethanol made from corn.
In writing the standard, the Air Resources Board declared that corn ethanol is of dubious value because farmers worldwide are chopping down trees to plant corn crops, a practice that releases carbon dioxide.
In their lawsuit, the farmers and ethanol producers say California's standard violates a 2007 federal law that requires increased use of ethanol in the nation's gas tanks.
California's climate-change initiative is under attack in other arenas. Assemblyman Dan Logue, R-Linda, is trying to organize a ballot initiative for November that would suspend AB 32 until the statewide unemployment rate falls below 5.5 percent for a year.
At the same time, the Air Resources Board continues to write the rules for carrying out AB 32 – a process that has also faced intense scrutiny from industry and environmental groups. Among other things, the agency is developing a "cap and trade" system designed to use market forces to help reduce greenhouse gases, said board spokesman Stanley Young.
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