California took aim Thursday at the oil industry and its impact on global warming, adopting the world's first regulation to limit greenhouse gas emissions from the fuel that runs cars and trucks.
The Air Resources Board voted 9 to 1 in favor of the complex new rule, which is expected to slash the state's gasoline consumption by a quarter in the next decade. It seeks to expand the market for electric and hydrogen-fueled vehicles and jump-start a host of futuristic biofuels to replace corn-based ethanol, as well as oil.
Gov. Arnold Schwarzenegger praised the "first-in-the-world low carbon fuel standard," noting that 16 other states are looking to California as a model and that President Obama has called for a national standard.
It will "not only reduce global warming," he said, "it will reward innovation, expand consumer choice and encourage the private investment we need to transform our energy infrastructure."
The regulation requires producers, refiners and importers of gasoline and diesel to reduce the carbon footprint of their fuel by 10% over the next decade. And it launches the state on an ambitious path toward ratcheting down its overall heat-trapping emissions by 80% by mid-century -- a level that some scientists deem necessary to avoid drastic global climate disruption.
Experts say California faces droughts, fresh water shortages, rising sea levels and widespread extinction of plants and wildlife species from growing carbon dioxide emissions worldwide.
Scores of industry executives and environmental activists testified on the hotly debated fuel regulation at a daylong public hearing in Sacramento before the vote. Corn ethanol producers complained that the rule unfairly exaggerated the effects of using food crops for energy. Cattlemen argued that diverting corn to ethanol has upped their feed costs.
Canada's consul general in San Francisco charged that the rule discriminates against oil from Alberta tar sands. And former Gen. Wesley Clark, testifying for the ethanol industry, said the board failed to account for carbon-intensive effects of U.S. military forces protecting oil reserves in the Middle East.
The regulation calculates the life cycle of fuels from their extraction -- or cultivation, in the case of biofuels -- to their combustion. But the indirect effect of replacing cropland used for energy will also be included, and the board's calculations of those land-use effects is strongly disputed by corn ethanol producers.
Meanwhile, U.S. oil industry representatives were also divided. The Western States Petroleum Assn. opposed the rule, disputing the air board's contention that it will lower the cost of fuel to consumers.
"This is the most transforming regulation any of us has ever undertaken," said Catherine Reihis-Boyd, the group's Sacramento lobbyist, noting that it involved "fuels that haven't even been envisioned and certainly not commercialized."
But James Uihlein, a Chevron representative, endorsed the standard, and its indirect land-use provisions, as "sending the right signal to innovators" to produce advanced fuels.
Not all of the alternative fuel companies were in sync, however. An executive from Fulcrum BioEnergy, a Pleasanton, Calif., company that makes cellulosic ethanol from post-recycled garbage, said it will "create a market" for his product. But a representative of Verenium, a cellulosic ethanol company with offices in San Diego, asked the board to hold off on counting land-use effects.
Board members acknowledged that the science of evaluating the carbon footprint of all fuels is still developing. It asked staff to further study the land-use issue and report back in January 2011. The standard is scheduled to take effect in 2012, gradually ramping up to the 10% reduction by 2020.
"We have done a lot to make cars cleaner and more efficient, but the petroleum industry, which has a lot more reserves, has gotten off scot-free with respect to greenhouse gases," said board Chairwoman Mary D. Nichols. "Now we are creating the framework for a new way of looking at automotive fuels. No longer will petroleum be the only game in town."
Some environmentalists who favor a stronger emphasis on electric vehicles said the rule did not go far enough in questioning the land-use effects of ethanol from nonfood crops such as switch grass or farmed trees. Others urged the board to monitor the construction of advanced fuel facilities so they would not increase inner-city air pollution.
Roland Hwang, transportation director of the Natural Resources Defense Council, criticized the board's delay of final action on land-use impacts, which he said were "critical safeguards for our native forests . . . and scenic wild lands."
But he added that the new standard means "the handwriting is on the wall: Big Oil needs to stop investing in dirty, high-carbon fuels and move to produce more advanced biofuels."