Court to hear arguments in Calif. clean fuels case

[October 16, 2012]  SAN FRANCISCO (AP) -- A federal appeals court will hear arguments in a case seeking to stop California's first-in-the-nation mandate requiring petroleum refiners and ethanol producers to make cleaner fuels for millions of cars and trucks in the state.

At issue before the 9th U.S. Circuit Court of Appeals is the constitutionality of California's "Low Carbon Fuel Standard," an important piece of the state's landmark global warming law, AB 32.

The mandate requires petroleum refiners, fuel distributors and others to make cleaner-burning fuels for the California market.

But out-of-state oil refiners and biofuels producers have sued over the law, saying it will give an unfair advantage to in-state fuels producers. They argue the law violates the U.S. Constitution's commerce clause by imposing limits on interstate commerce.

U.S. District Court Judge Lawrence O'Neill in Fresno agreed with the plaintiffs, and earlier this year halted implementation of the new law.

The 9th Circuit in April removed O'Neill's injunction after the state appealed, and allowed the law to move forward while the case wends its way through the courts.

The California Air Resources Board, the agency in charge of implementing the law, said the standard will cut California's dependence on petroleum by 20 percent, and will account for one-tenth of the state's goal to cut greenhouse gas emissions by 2020.

Pat Parenteau, an environmental law professor at Vermont Law School, said the fuel standard is integral to the state's greenhouse gas reduction goals. The appeals court's decision will set an important precedent as other coastal states try similar tactics to reduce their carbon footprints, he said.

"California is ground zero for climate change with sea level rise, loss of snowpack and increased threats of wildfires," Parenteau said. "California has the strongest argument that it has to take these kinds of measures to protect its environment, public health and welfare."

The transportation sector is the largest emitter of greenhouse gases in California. Under the law, all vehicle fuels must on average be 10 percent less carbon-intensive by 2020.

The regulation doesn't mandate specific alternatives fuels, but instead assigns them a so-called "carbon-intensity score." The score accounts for pollution created during the entire life cycle of a fuel, not just when it is burned in a vehicle.

Plaintiffs say this fact discriminates against fuels produced out of state, because the transportation of a fuel into the state alone would increase its carbon intensity score.

"CARB conveniently stacks the deck to favor fuels made in California over those made in the Midwest," the Rocky Mountain Farmers Union and other agricultural plaintiffs argued in court documents.

"Simply put, when comparing identical products made from identical processes head-to-head under the (law), the fuel made in California automatically receives approximately a 10 percent advantage over Midwest competition."

California Attorney General Kamala Harris and attorneys for environmental groups appealed to the 9th Circuit, and have asked the court to overturn O'Neill's ruling.

"The (mandate) has nothing to do with imposing California's 'preferences' on other states," the state said its court filings. "(It) offers incentives for cleaner, alternative fuels to inventors, engineers and fuel producers without regard to location."

[Associated Press; By JASON DEAREN]

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