LCFS: Imposing Expensive California Fuels on a Town Near You

On March 21, the American Fuel & Petrochemical Manufacturers (AFPM), the American Trucking Associations (ATA), and the Consumer Energy Alliance (CEA), filed a petition for writ of certiorari to the U.S. Supreme Court challenging the constitutionality of California’s Low Carbon Fuel Standard (LCFS).

The LCFS came about in 2006, after the California Legislature passed and Governor Arnold Schwarzenegger signed AB 32, the Global Warming Solutions Act. AB 32 set a goal of reducing California’s greenhouse gas emissions to 1990 levels by 2020. Pursuant to the state’s emission reduction target, in Jan. 2007 Governor Schwarzenegger signed Executive Order S-01-07 establishing the Low Carbon Fuel Standard (LCFS). The LCFS requires fuel providers to reduce the carbon intensity of gasoline and diesel fuel by 10 percent by 2020.

Mandating a low carbon fuel standard is one thing; implementing one is something else. The implementation of the LCFS will make fuel more expensive and may even increase greenhouse gas emissions. The simple truth is that there is no cost-effective way to reduce the carbon intensity of fuel.

In addition to increasing fuel costs and harming the environment, the LCFS may also be unconstitutional. As AFPM General Counsel Richard Moskowitz explains:

California’s Low Carbon Fuel Standard (LCFS) discriminates against fuel produced outside of the state and is an unlawful expansion of California’s regulatory authority to control the manner in which fuel is produced outside its borders. Moreover, AFPM believes that the harm the LCFS impermissibly inflicts on interstate and foreign commerce is too great to ignore, and therefore, we have asked the U.S. Supreme Court to hear the case.

As we have explained on these pages before, California’s LCFS makes fuel more expensive for motorists and does not improve the environment. This is because biofuels (the alternative to conventional gasoline) are both more expensive and in some cases more carbon intensive than conventional gasoline. In fact, according to a forthcoming report from the United Nations, widespread use of biofuels actually harms the environment more than it helps.  Moreover, as AFPM explains in its petition, LCFS empowers California regulators to dictate how fuel is produced in other states.

Litigation over the constitutionality of California’s LCFS began in 2010 when AFPM, along with ATA, CEA, and the Center for North American Energy Security, filed suit against the California Air Resources Board. Most recently, the Ninth Circuit Court of Appeals denied AFPM’s petition for an en banc rehearing of the case. For a full timeline of the litigation, click here.

To learn more about California’s flawed LCFS, click here.

IER Policy Associate Alex Fitzsimmons authored this post.