(Renewable Fuels Association) Proposed regulations updating California’s Low Carbon Fuel Standard are fundamentally flawed and could significantly restrict the future use of low-carbon ethanol in the state, the Renewable Fuels Association noted in comments submitted late Wednesday to the state’s Air Resources Board (CARB).
The comments, which build on RFA’s previous submission filed in August, underscore that renewable fuel producers and California consumers will suffer if CARB moves ahead with its unnecessary and inexplicable proposal for new “sustainability” requirements and an arbitrary new method for assigning hypothetical land use change penalties.
“If CARB had its thumb on the scale against ethanol before, now they are trying to give themselves the authority to put their whole fist on the scale,” said RFA President and CEO Geoff Cooper. “This proposal is completely disconnected from reality and, if finalized, will very likely result in shortages of low-carbon fuels and higher fuel prices for California consumers.”
CARB says the onerous new sustainability requirements are necessary to mitigate the “rapid expansion of biofuel production and biofuel feedstock demand.” However, the data clearly show that there is no “rapid expansion” in U.S. corn ethanol production and historical growth has been accommodated with existing cropland and higher productivity. Applying the sustainability criteria to U.S. corn ethanol makes no sense in light of the hard evidence documenting the efficiency and sustainability associated with the industry’s growth, according to RFA’s comments.
Moreover, the proposed changes are unworkable for U.S. farmers and ethanol producers, RFA said. The proposal includes overreaching language that appears to extend beyond CARB’s authority, along with unrealistic requirements for commodity traceability. RFA’s Chief Economist Scott Richman writes: “CARB should seriously reconsider such a broad and sweeping mandate that could result in an invalidation of LCFS credits due to an unrelated violation that occurs outside of both a fuel provider’s control and CARB’s jurisdiction.”
RFA also argues that the development and assignment of land use change penalties should be based on scientific data and modeling and must be subject to an appropriate public rulemaking process. The draft regulations provide broad new discretion for the CARB executive officer to unilaterally adjust LUC factors for existing pathways and to assign new LUC factors for feedstock/fuel combinations not included in the current lookup table.
“Given the magnitude of the implications of the LUC provisions, it seems inappropriate and outside of the bounds of California regulatory guidelines for CARB to make unilateral changes to LUC factors without following a well-defined process, including public workshops and a formal rulemaking,” Richman wrote.
Click here for RFA’s comments to the California Air Resources Board. READ MORE
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Excerpt from Bloomberg Law: State officials now say they can’t estimate price increase; Board vote reignites gas price issue ahead of election
The California Air Resources Board is set to approve updated fuel regulations that should lower fuel emissions but are also likely to raise gas prices.
The state regulators will vote Nov. 8 on the rules, known as the Low Carbon Fuel Standards, after several revisions over the last year.
State officials and analysts have estimated the changes could add from 47 cents to 65 cents to the cost of a gallon of gasoline in the near term in the state with the highest average gas prices.
CARB Executive Officer Steven Cliff told reporters Friday that the agency can’t predict how ... READ MORE
Excerpt from Office of Governor Gavin Newsom: Keeping gas prices low & holding Big Oil accountable
Last week, Governor Newsom signed legislation that allows the state to require oil refiners to maintain a minimum inventory of fuel to avoid supply shortages that create higher gasoline prices for consumers and higher profits for the industry. It also authorizes the California Energy Commission to require refiners to plan for resupply during refiner maintenance outages. It will help prevent price spikes that cost Californians upwards of $2 billion last year.
Following gasoline price spikes in 2022, Governor Newsom called for a special session and worked in partnership with the Legislature to sign into law a package of reforms holding Big Oil accountable.
California’s new watchdog found that higher gasoline prices were caused by a suspicious market transaction, refinery maintenance without properly preparing for it, and more.
In January of this year, the watchdog sent Governor Newsom and the legislature a letter outlining specific proposals to reform California’s gasoline spot market, which included a minimum inventory requirement to prevent price spikes due to lack of stable supply.
The state’s gasoline price watchdog also found that, in 2023, gasoline prices spiked largely due to refineries going offline without adequately planning to backfill supplies, which caused refining margins to spike as spot and retail prices jumped — indicating that refinery margins made up the largest proportion of the price spikes between July and September 2023. READ MORE
Excerpt from The Hill: All 12 of the Golden State’s U.S. House members sent a letter on Friday to the California Air resources Board (CARB), urging the agency to delay a decision that they believe would cause undue pain at the pump. The vote is scheduled for Nov. 8, just three days after the national elections.
“State agencies should not be enacting new regulations raising our cost of living by dramatically increasing already-high gas prices,” Rep. Michelle Steel (R), who led the letter, said in a statement.
“CARB must delay their November 8 vote and study the impact their regulations will have on all Californians,” added Steel, who is up for reelection in a tight race against Democrat Derek Tran.
...
The proposed amendments to the Low Carbon Fuel Standard center on “increasing the stringency of the program to more aggressively decarbonize fuels.”
...
Among the possible changes include incentivizing more production of clean fuels, such as low-carbon hydrogen, as well as reducing methane emissions and integrating biologically sourced methane into the transportation sector.
At the same time, the amendments would also strengthen guardrails on crop-based fuels, to avoid deforestation and other possibly adverse impacts.
But the U.S. House Republicans argued in their letter that implementing more stringent standards “would create a hidden 47 cent per gallon fee on California drivers every time they go to the pump in 2025.”
The writers were citing assessments included in CARB’s September 2023 regulatory impact report, although the agency has since backtracked on these evaluations.
Specifically, the report said that in 2025, the amendments could lead to price hikes in gasoline, diesel and petroleum-based jet fuel by about $0.47, $0.59 and $0.44 per gallon, respectively.
Yet earlier this month, a statement from CARB stressed that these increases were only estimates based on models, noting that they “should not be misconstrued as a prediction of the future credit price nor as a direct impact on prices at the pump.”
However, the letter writers slammed CARB for failing to reissue a regulatory impact analysis, while accusing the agency of misleading members of the public.
“CARB’s new and opaque approach comes as Californians continue to weather gas prices $1.50 per gallon above national averages,” the writers stated.
Stressing that Californians with lower economic means typically shoulder the burden when the state raises costs of living, the writers urged CARB to evaluate how the proposals would impact these populations.
“Californians are already paying the highest gas prices in the nation because of our state’s gas tax,” co-lead writer Rep. David Valadao (R-Calif.) said in a statement.
“It is unacceptable that unelected bureaucrats at CARB are attempting to quietly pass new rules that will raise gas prices even more for Central Valley families,” added Valadao, who is also facing a tight race next week against his Democratic opponent, Rudy Salas, in his agriculture-rich region.
The writers collectively called for “complete transparency” and “a well-defined process for public feedback,” which they described as crucial to maintaining CARB’s regulatory integrity. READ MORE
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