California Waits for Legal Ruling on Tar Sands

California Waits for Legal Ruling on Tar Sands

2/6/2012

 

In California, there is an ongoing high-stakes legal battle over whether the clean air agency of the state can enforce a novel rule that seeks to slash transportation fuel carbon emissions. The dispute is being closely monitored because the decision could choke carbon-intensive oil sands’ global market demand at a time that is considered very precarious for the industry.

The Obama administration on Wednesday rejected a permit for the contentious Keystone XL pipeline. The project could have increased fuel imports into the United States by up to 830,000 barrels per day. The rejection was considered by the oil industry and its allies as a major setback, while environmentalists and their allies regard it as an unexpected victory. The two opposing sides are now facing each other in this lawsuit.

The low-carbon fuel standard of California is an attempt to oblige oil suppliers to reduce their motor fuels’ carbon footprint, measured not only by emissions from tailpipes but also across their entire lifecycle, which means from extraction to combustion. Many states are closely monitoring the case in California because they are also considering adopting similar rules.

In 2009, the influential Air Resources Board (CARB), has adopted the Low Carbon Fuel Standard as part of its notable global warming measure, A.B. 32. The rule was supposed to be enforced by the agency in Jan. 1, 2012. Oil companies, however, say that the law unfairly penalizes fuels like oil sands crude. The oil industry furiously lobbied against and fought for the junking of the standard. On Dec. 29 of last year, a federal judge in Fresno, California, ruled in their favor, saying that CARB cannot enforce the provisions of the law until a pending lawsuit, which was filed by the oil industry and ethanol supporters, is resolved in 2013.

WRITTEN BY:

blakeh@wellsdrew.com