WASHINGTON, March 20, 2014 – The ethanol industry, represented by the Renewable Fuels Association (RFS) and Growth Energy, asked the Supreme Court today to rule on the constitutionality of California’s clean-fuel regulations, known as the Low Carbon Fuel Standard (LCFS).
The regulations, among the most stringent in the country, were adopted in 2007 as part of climate change legislation backed by then-Gov. Arnold Schwarzenegger. The standard requires the oil industry to gradually reduce the “carbon intensity” of transportation fuels like diesel and gasoline by at least 10 percent by 2020. Transportation accounts for about 40 percent of greenhouse gas emissions in the state.
“California, through adoption of the LCFS, has violated the most basic, structural features of interstate federalism,” the industry groups said in a news release. “LCFS not only discriminates against out-of-state commerce, but it seeks to regulate conduct in other states in direct contravention of our constitutional structure and at the direct expense of Midwestern farmers and ethanol producers.”
RFA and Growth Energy decided to go forward with a Supreme Court challenge after a divided panel of the Ninth Circuit Court of Appeals found the the California LCFS does not discriminate against interstate commerce and does not constitutes extraterritorial regulation in violation of the Commerce Clause.
The two groups said that California, by its own admission, is using LCFS as a way to regulate greenhouse gas emissions occurring in other states by punishing industrial and agricultural activity taking place outside California, including Midwest ethanol producers.
Under the standard, state regulators assess different fuels – from gasoline to ethanol made from corn, sugar or cellulosic materials – and assign each a carbon intensity “score.” Carbon intensity is measured “from the well to the wheel,” taking into account greenhouse gas emissions covering the entire life cycle of the fuel, from extracting and refining to transporting the fuel to local gas stations. The main aim of the LCFS is to push the oil industry to invest in new technology and cleaner fuels like electricity, biofuels, hydrogen and natural gas.
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