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Ethanol Industry Sues California

Posted Feb 01 2010 8:21am
Ethanol Industry Sues California

The Federal government is asking the fuel industry to incrementally raise the levels of ethanol in the country’s gas. California has state legislation called the California Global Warming Solutions Act of 2006 calling for car fuels to reduce greenhouse gas (GHG) emissions. The California Air Resources Board counts indirect GHG’s created in the production of ethanol, meaning it will not be part of California’s solution when the plan starts in 2011. The Air Resources Board believes it is doing its duty, as “the Legislature declared that global warming poses a serious threat to the economic well-being, public health, natural resources, and the environment of California.” The ethanol industry isn’t about to say aw, shucks.

Photo Credit: vanhookc Ethanol from midwestern farms like this one are drawing a lawsuit from out West

Ethanol from midwestern farms like this one are drawing a lawsuit from out West

In 2007 the California Air Resources Board adopted nine discrete early action measures to reduce greenhouse gas emissions, one of which was the “Low Carbon Fuel Standard.” An Executive Order from Governor Schwarzenegger instructs that these measures “reduce the carbon intensity of transportation fuels used in California by at least 10 percent by the year 2020 [based on 1990 levels].” The regulation places the burden of compliance on regulated parties that are “upstream entities,” meaning producers and importers, as opposed to fueling stations.

“Carbon intensity” is determined by 1) the “direct emissions associated with producing, transporting, and using the fuel” and 2) the “other effects, including those caused by changes in land use.  For some crop-based biofuels, staff has identified land use changes as a significant source of additional GHG emissions.  Aye, here’s the rub: the ARB “is proposing that emissions associated with land use changes be included in the carbon intensity values assigned to those fuels in the regulation.”

So, GHG emissions created by the entire process of growing the corn for ethanol count for ethanol’s carbon intensity calculation in the state of California. Which means that ethanol won’t be part of California’s Low Carbon Fuel Standard early action measure- it will be part of the problem.

In response, Growth Energy, the American Coalition for Ethanol, the Renewable Fuels Association, the Rocky Mountain Farmers union, Minnesota Corn and Soybean Growers, and Penny Newman Grain, Inc., along a variety of other state and local farm groups and ethanol trade groups, collectively calling themselves the American Coalition for Ethanol, filed a federal lawsuit on December 24 in Fresno, California against the California Air Resources Board. The lawsuit challenges California’s low carbon fuel standard, claiming that it “unfairly discriminates against corn-based ethanol made primarily in the Midwest, in violation of the Commerce and Supremacy clauses of the U.S. Constitution.”

Further, that the fuel standard “is unconstitutional because (i) it conflicts with and is preempted by federal law, including the Energy Independence and Security Act of 2007; (ii) it interferes with the regulation of interstate commerce; and (iii) it discriminates against out-of-state corn ethanol producers and importers and improperly regulates their extraterritorial conduct.”

The consortium of groups filing the lawsuit is notable because it brings together the Rocky Mountain Farmers Association and Growth Energy, two groups that have long been at odds over how ethanol is represented in Washington and the national media. The corn growers and the producers of ethanol are uniting to battle California’s Air Resources Board.

Essentially, the Air Resources Board doesn’t think ethanol really reduces greenhouse gas emissions and they don’t want it as part of the California state program. The ethanol industry is circling the wagons. Will the Court say that California’s ARB is full of hot air? Or will the ethanol industry be cut down before it’s even knee high? Get yourself a bowl of popcorn and watch the show.

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