The battle over California’s greenhouse gas regulations has shifted to the federal courts in an effort to slow down and shed more light on the issues surrounding the first in the nation mandates for cleaner, low-carbon fuels. Those regulations need to be vetted to understand what they mean to California consumers and the economy.
The way CARB regulations and other attacks on oil production are shaping up both consumers and the economy are bound to suffer.
Yesterday’s filing in the U.S. District Court in Fresno was the third lawsuit to challenge Low Carbon Fuel Standard regulations adopted by the California Air Resources Board.
The National Petrochemical & Refiners Association, American Trucking Associations, The Center for North American Energy Security and the Consumer Energy Alliance claim in the lawsuit that the regulations interfere with interstate commerce and do little to reduce the country’s greenhouse gases.
The regulations require that “carbon intensity” be measured in determining if fuels meet the required standards. This means that not only the fuel’s physical characteristics are to be measured but also the energy necessary to transport that fuel to market in California. Such a rule will limit the ability to import fuels into the state from other locations in North America thus invoking the challenge to the interstate commerce clause.
Such a rule almost prohibits higher-carbon-intensity fuels from coming into California meaning California consumers are facing higher costs for fuel and relying on biofuels that likely will not meet consumer demands.
In addition, you have to wonder if there is a grand scheme that ultimately would punish the California consumer further if pressure to levy an oil severance tax in California is successful.
Playing out the full scenario, if the CARB regulations stand shutting down out of state high-carbon-intensity fuel from being shipped to the state and the in-state oil production is reduced or crippled with the burden of new taxation, where does California get its fuel? And at what cost to the consumer?
The answer seems to be foreign oil at greatly increased costs and alternative sources that are not prepared to meet current demands.
If this grand scenario plays out, the losers will be the California economy and consumers.