Judge blocks California’s low-carbon fuel rules

A federal judge on Thursday temporarily halted California’s ability to enforce rules to reduce the carbon footprint of transportation fuels, effectively taking the regulatory teeth out of the state’s year-old program.

U.S. District Judge Lawrence O’Neill issued a preliminary injunction that ruled the California Air Resources Board’s low-carbon fuel regulations violated the U.S. Constitution’s commerce clause by discriminating against crude oil and biofuels producers located outside California.

The regulations require producers, refiners and importers of gasoline and diesel to reduce the carbon footprint of their fuel by 10% over the next decade, as part of California’s landmark global-warming law aimed at reducing greenhouse gas emissions to 1990 levels by 2020.

The regulation calculates the life cycle of fuels from their extraction — or cultivation, in the case of biofuels such as corn-based ethanol — to their combustion. For example, the state considers how corn is grown, harvested and converted to ethanol intended for California gas tanks, a life-cycle evaluation called “seeds to wheels.�

Industry groups applauded the decision and said the program would have resulted in higher fuel costs for California consumers.

In a joint statement, Bob Dineen, president of the Renewable Fuels Assn., and Tom Buis, chief executive of Growth Energy, which were plaintiffs in the case, said, “With this ruling, it is our hope that the California regulators will come back to the table to work on a thoughtful, fair, and ultimately achievable strategy for improving our environment by incentivizing the growth and evolution of American renewable fuels.�

The judge’s ruling did not invalidate the air board’s low-carbon fuel program or its reporting requirements. But the injunction does remove the state’s ability to punish fuel wholesalers and refineries that sell gasoline or biofuels whose carbon footprint exceeds state guidelines.

In the first year of the program, wholesalers were to reduce the carbon footprint of their products 0.25% .

Air board spokesman Stanley Young defended the program as “an evenhanded standard that encourages the use of cleaner low carbon fuels,� adding that “it does not discriminate against any fuels on the basis of geography.�

Young said the agency will go back to O’Neill’s court next week seeking clarification of the ruling and will appeal to the U.S. 9th Circuit Court of Appeals.

Oil refiners and corn-ethanol producers filed suit last year, alleging that the mandate was unfairly punitive to out-of-state fuel suppliers.

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