“California’s pioneering spirit is alive and well, but what may be popular politically in Sacramento today may be a recipe for failure in Washington and elsewhere around the country tomorrow. As some policymakers in Washington and the other state capitals look to California for policy guidance in crafting fuels, environmental or labor policies, they would do well to understand the ramifications and consider the unintended consequences for their own constituencies, and should take a hard look at both the successes and failures of some of that state’s costly initiatives. Political expedience should never trump a reasoned, methodical approach, nor should one state’s initiative be swiftly and blindly accepted as a blanket policy for the rest of the country.”
President, National Petrochemical & Refiners Association (NPRA)
January 12, 2009
California’s Low Carbon Fuel Standard: Costly and Potentially Unachievable
The California Air Resources Board’s (CARB) December 2008 draft proposal for a Low Carbon Fuel Standard (LCFS) calls for a reduction in carbon intensity of 10.5 percent for gasoline and gasoline substitutes, and a reduction of 10 percent for diesel and diesel substitutes, by 2020.
- Eleven Northeast and Mid-Atlantic states have announced that they are following California in adopting their own LCFS. Inside EPA reported January 9, 2009 that “[t]he Northeast states’ announcement comes as California is poised to adopt the nation's first LCFS for transportation fuels in late March and as EPA grapples with how to conduct a lifecycle greenhouse gas (GHG) analysis under its expanding RFS, as mandated by the 2007 energy law.”
- In an April 2008 study, CRA International found that under a nationwide low carbon fuel standard to reduce greenhouse gas emissions by 5 percent and 8 percent in 2015 and 2020 respectively, gasoline prices would increase by more than 140 percent by 2015.
- Successful implementation of an LCFS would require a massive substitution of traditional motor fuels with alternative and renewable fuels. However, as the current nationwide Renewable Fuels Standard demonstrates, the widespread production and use of such alternative fuels presents significant technological and environmental challenges. Any LCFS may either be unachievable or carry significant adverse consequences for consumers and for our nation’s environment, food supply, and energy security.
- Additionally, the indirect greenhouse gas emissions resulting from the increased production of alternative fuels calls into question the effectiveness of and available tools to develop “low-carbon” fuels. In a January 12, 2008 memorandum to CARB (working under contract to CARB), the Energy and Resources Group at the University of California Berkeley states that “…if indirect emissions are applied to the ethanol that is already in California’s gasoline, the carbon intensity of California’s gasoline increases by 3% to 33%.”
California’s Ethanol Requirements: Unfeasible According to Air Board’s Own Report
On August 29, 2008, the California Air Resources Board finalized a rule requiring refiners to increase the amount of ethanol blended into gasoline from 5.7 percent to as much as 10 percent by December 2009.
Under the California Health and Safety Code, CARB may adopt a motor vehicle fuel standard found to be “necessary, cost-effective, and technologically feasible…” Refiners must begin producing fuel meeting the new standard by December 31, 2009 – 16 months after approval of the regulations. However, in its June 14, 2007 Final Statement of Reasons (FSOR), CARB found that “the refinery modifications could take up to 48 months…” CARB itself thus concludes that implementation of the new fuel standard is not technologically feasible.
- California’s Assembly Bill (AB) 32 requires CARB to develop policies to reduce greenhouse gas (GHG) emissions. In its FSOR, however, CARB states that “…our past assessments of the lifecycle GHG emissions attributable to current biofuel production did not account for indirect land use impacts, and new information suggests that these impacts are likely to be significant.” CARB acknowledges that increased GHG emissions could result from raising the ethanol content of gasoline to 10 percent; this violates the legislative intent of AB 32.
California’s Request for a Waiver on Greenhouse Gas Regulation: Little or No Environmental Impact
The State of California requested a waiver of Clean Air Act Preemption from the Environmental Protection Agency (EPA) to allow California to implement its own carbon dioxide emissions standards for motor vehicles. EPA denied the waiver request on statutory grounds. President-elect Obama, however, has stated that he will seek to overturn EPA’s decision.
- In denying the waiver, EPA Administrator Johnson wrote in a December 19, 2007 letter to California Governor Arnold Schwarzenegger that “EPA has considered and granted previous waivers to California for standards covering pollutants that predominantly affect local and regional air quality. … Unlike other air pollutants covered by previous waivers, greenhouse gases are fundamentally global in nature. … In other words, this challenge is not exclusive or unique to California and differs in a basic way from the previous local and regional air pollution problems addressed in prior waivers.”
- The Alliance of Automobile Manufacturers testified May 22, 2007 before EPA that “…a patchwork of state-level fuel economy regulations as is now proposed by California is not just unnecessary but actually counter-productive. This brings us to the subject of the California waiver request. … First, California has the initial burden of fully explaining the basis for its waiver request in this proceeding. The waiver application presented to EPA contains many assumptions and undocumented claims about the benefits of the regulation and how the industry can comply with it. … EPA must deliberately and thoroughly approach the questions raised by the waiver application, especially when that application contains no evidence that the new standards will have any beneficial impact on the environmental conditions of concern.”
California’s “Rest Period” Law: Cookie-cutter Approach Fails to Acknowledge Workplace Variety
As mandated by the California Labor Code, virtually all employees are required by law to receive two ten-minute breaks and one half-hour meal period per eight-hour workday. Specifically, the law mandates that after no longer than five hours of work, an employee must take his or her 30-minute leave period outside of the employee’s work area. While well-intentioned, such policy cannot be blindly applied across the board.
- As the Employer Resource Institute’s California Employer Advisor notes, “[t]he California meal and rest period requirements are a notorious source of problems and confusion for employers.”
- The “rest period” law was not conceived for, nor takes into account, the unique circumstances at some locations of employment. Many employees at refineries, for instance, simply cannot leave their work stations for a 30-minute period for site safety and security reasons.
California’s “Green Chemistry” Initiative: Redundant and Fails to Account for Costs
Expanding on two laws passed by the State legislature in 2008, California will seek to advance a “green chemistry” initiative legislatively and administratively in 2009. California’s Department of Toxic Substances Control (DTSC) issued six recommendations in December 2008 designed to serve as a “green chemistry” policy framework. While this policy has not been finalized, it presents a number of concerns.
- California’s “green chemistry” initiative is based on the European version of the Precautionary Principle, which essentially attempts to create an implausible risk-free society without regard to cost. This initiative would negatively impact not only chemical manufacturers, but businesses and products across the economic spectrum, from cosmetics and household goods to automobiles and firefighting equipment.
- DTSC’s proposal to establish an online database of chemical toxicity is redundant. The United States National Library of Medicine’s Toxicology Data Network and the U.S. EPA Web site currently provide databases on toxicology, hazardous chemicals, environmental health, and toxic releases. DTSC’s proposal, if implemented, would constitute an unnecessary expenditure of resources to reinvent the wheel.