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CEA Continues LCFS Battle by Taking California’s LCFS to Court

Tuesday, February 9th, 2010

Consumer Energy Alliance (CEA) filed legal action last week in Fresno, California’s federal district court, requesting an immediate injunction on the state’s Low-Carbon Fuel Standard (LCFS) until a number of substantive legal concerns can be addressed. In its complaint, CEA states that the LCFS violates federal law by attempting to regulate “commerce and conduct” outside of the state, while imposing a mandate that even regulators admit will result in “little or no net change” to the carbon intensity of fuels on “a global-scale.”

Michael Whatley, vice president of CEA and former chief counsel for the U.S. Senate subcommittee on clean air and climate change, says this in a release regarding the suit:

“The practical outcomes of the California LCFS are higher fuel costs for consumers, dramatic reductions in the availability of those fuels, and a rapid expansion of the state’s already unacceptable level of dependence on foreign, unstable regimes for its energy. More relevant to today’s filing, the California LCFS also actually violates federal law – and stands in direct contravention of key consumer protections and safeguards enshrined in the U.S. Constitution.

“Perhaps it wasn’t the state’s intent, but as written, the California LCFS is an example of parochial protectionism run amok. But make no mistake: This isn’t the type of protectionism that will benefit California consumers; it’s the type that will ensure sources of essential energy are harder to find in the future, and much more expensive to purchase.”

In fact, in a recent analysis by the California-based Sierra Research, analysts determine that an LCFS would increase the cost of fuel in Golden State by $3.7 billion over the next decade – all while producing “no detectable change in climate.”

Newspapers from coast to coast took notice of CEA’s commonsense efforts to help thwart higher prices at the pump, including the Los Angeles Times, Associated Press, Energy Daily, ClimateWire and the San Francisco Chronicle. The Sacramento Bee’s Dale Kasler reports this under the headline “Oil and trucking industries challenge state’s fuel standard”:

The oil and trucking industries went to court today to challenge California’s low-carbon fuel standard, a massive set of regulations aimed at combating global warming. The standard will mean “higher fuel costs for consumers, dramatic reductions in the availability of those fuels, and a rapid expansion of the state’s already unacceptable level of dependence on foreign, unstable regimes for its energy,” said Michael Whatley of the Consumer Energy Alliance, one of the groups filing suit. The group said the standard will cost Californians billions while doing little to actually fight climate change.

Interestingly, President Obama’s cabinet also recently announced an initiative to increase the use of biofuels across the nation, which some say may lead the administration to eventually develop a federal LCFS. James Tankserly of the Los Angeles Times reports this:

The Obama administration today will unveil a revamped strategy to ramp up the nation’s use of biofuel in hopes of fixing a government effort that officials admit has fallen short in its attempts to wean cars and trucks away from fossil fuels and move toward ethanol, biodiesel and other crop-based fuels. Under the new approach, federal agencies will start from the 2022 goal and work backward, setting milestones for progress to ensure the effort is on track. The White House plans to pitch the effort as a job-creator in rural communities. But biofuels are not without their controversies.

Critics say increased fuel production could push food prices higher, and the administration is mulling a so-called “low-carbon fuel standard” that could penalize some forms of ethanol production for resulting in relatively high amounts of greenhouse gas emissions.

Despite the fact that an LCFS proposal was not mentioned during the Obama Administration press conference, Biodiesel Magazine quotes officials from the National Resources Defense Council:

Director of the National Resources Defense Council Nathanael Greene said, “The final rule confirms that some biofuels reduce global warming and some pollute more than gasoline and diesel. This proves how important it is to put policies in place to make sure public dollars go to support real renewable energy instead of going after options that do not work and could actually do more harm than good.” He added that a reform to the bio tax credits and a low carbon fuel standard like California’s are “best next steps.”

While the fight in California is far from over, it is clear that the threat still exists with many states and regions across the nation that are working to pass LCFS proposals, including policymakers in Washington, D.C., the Mid-West, the Northeast and the Mid-Atlantic.

With more than 260,000 grassroots supporters and 130 affiliates representing both the major consuming and producing segments of the U.S. energy sector, CEA has many battles ahead and will continue to be an active contributor to the national debate on LCFS.

Tags: Consumer Energy Alliance, LCFS, Low Carbon Fuel Standard, Secure Our Fuels, Sierra Research
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CEA: California LCFS Bad for Consumers, Bad for Producers, and Violates Federal Law

Tuesday, February 2nd, 2010

Consumer Energy Alliance files complaint with District Court in Fresno asking for immediate injunction on Low-Carbon Fuel Standard

FRESNO – California’s recently implemented Low-Carbon Fuel Standard (LCFS) violates federal law by attempting to regulate “commerce and conduct” outside of the state, while imposing a mandate that even regulators admit will result in “little or no net change” to the carbon intensity of fuels on “a global-scale.” Such is the formal complaint filed by Consumer Energy Alliance (CEA) in the U.S. District Court for the Eastern District of California today, asking the court to suspend the imposition of a statewide LCFS until a number of substantive legal concerns can be addressed.

“The practical outcomes of the California LCFS are higher fuel costs for consumers, dramatic reductions in the availability of those fuels, and a rapid expansion of the state’s already unacceptable level of dependence on foreign, unstable regimes for its energy,” said Michael Whatley, vice-president of CEA and former chief counsel for the U.S. Senate subcommittee on clean air and climate change. “More relevant to today’s filing, the California LCFS also actually violates federal law – and stands in direct contravention of key consumer protections and safeguards enshrined in the U.S. Constitution.”

Formally adopted last month after the state’s Office of Administrative Law (OAL) issued its final approval, the California LCFS, according to its authors, seeks to reduce the carbon-intensity of fuels included in the state’s transportation mix “while stimulat[ing] the production and use of alternative, low-carbon fuels.” But under the bizarre accounting methodology of the plan, energy sources with physically identical chemical properties and carbon contents can – and, in fact, must be – treated differently under the law, with in-state sources significantly advantaged over resources that are found and produced outside California.

“Perhaps it wasn’t the state’s intent, but as written, the California LCFS is an example of parochial protectionism run amok,” added Whatley. “But make no mistake: This isn’t the type of protectionism that will benefit California consumers; it’s the type that will ensure sources of essential energy are harder to find in the future, and much more expensive to purchase.”

In support of that statement, Whatley pointed to a recent analysis of the proposed state LCFS completed by California-based Sierra Research. In that study, analysts from Sierra found that an LCFS will increase the cost of fuel in California by $3.7 billion over the next decade – all while producing “no detectable change in climate.”

With more than 260,000 grassroots supporters and 130 affiliates representing both the major consuming and producing segments of the U.S. energy sector, CEA has been an active contributor to the national debate on LCFS – including the proceedings in California – for the better part of the last two years.

Last August, the Washington, D.C.-based Center for North American Energy Security, a CEA member, sent a letter to the California Air Resources Board (CARB) detailing the myriad short-comings with the LCFS, and several CEA members (including the National Petrochemical & Refiners Association and the American Trucking Associations – which joined CEA in filing the complaint today) have lodged formal comments with CARB objecting to the plan as well. In addition, CEA wrote directly to U.S. Sen. Barbara Boxer (D-Calif.) in October identifying several significant consequences that consumers should expect to encounter under the initiative.

What follows are several key excerpts taken from the CEA complaint filed in Fresno this morning:

42. Because “carbon intensity” is designed to account not only for a fuel’s physical characteristics, but also the energy necessary to bring the transportation fuel to market in California, chemically identical fuels are assigned different carbon intensities under the LCFS. LCFS § 95486(b), Tables 6–7.

44. By regulating the “fuel pathway” of transportation fuels – i.e., the manner in which transportation fuels are produced and ultimately reach the California market – the LCFS directly regulates interstate commerce and conduct occurring outside of California.

47. CARB has admitted that, because no other states have adopted a similar standard, “fuel producers are free to ship lower-carbon-intensity fuels to areas with such standards, while shipping higher-carbon-intensity fuels elsewhere.” CARB, California’s Low Carbon Fuel Standard: An Update on the California Air Resources Board’s Low Carbon Fuel Standard Program (Oct. 2009) at 1.

48. According to CARB, “[t]he end result of this fuel ‘shuffling’ process is little or no net change in fuel carbon-intensity on a global scale.” Id.

49. In fact, the “fuel shuffling” promoted by the LCFS likely will lead to an overall increase in GHG emissions, because it will mean redirecting fuels and feedstocks destined for California to other states through less efficient and redundant supply lines. Id.; see also CARB, Final Statement of Reasons (Dec. 2009) at 234–35.

50. The burdens imposed by the LCFS on the interstate market for transportation fuels and fuel feedstocks in California are clearly excessive when measured against the putative local benefits of the LCFS in California.

Tags: American Trucking Association, Center for North American Energy Security, Consumer Energy Alliance, Low Carbon Fuel Standard, National Petrochemical & Refiners Association
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State LCFS Profile: Washington State

Monday, February 1st, 2010

What Is a Low-Carbon Fuel Standard (LCFS)?

Sold to the public as a way to clean up our transportation fuels while cutting down on the amount of carbon dioxide emitted into the atmosphere, in reality the Low-Carbon Fuel Standard (LCFS) isn’t about making the fuels in your car any better, cleaner or more affordable than it already is – it simply seeks to render those fuels more difficult to find and even more expensive to purchase.

State of Play: LCFS in Washington State

Late last year, the Washington Policy Center made public the contents of a classified memo from Gov. Chris Gregoire’s chief of staff laying out a sophisticated plan for implementing the California LCFS model in Washington. The memo reveals that the ultimate objective of the Washington LCFS is to force regulators in Washington, D.C. to impose a similarly destructive mandate nationwide.

Two weeks after receiving that document, Gov. Gregoire issued Executive Order 09-05 – directing her cabinet to “assess whether the California low-carbon fuel standards … would best meet Washington’s greenhouse gas emissions reduction targets.” Consultants were hired and public workshops were scheduled. And even though serious questions remained unanswered (“Is the policy ahead of the science?” asks one agency PowerPoint), Washington regulators commenced with their work. The governor is expected to announce what comes next in July.

Production and Distribution: How/Where Does Washington Get Its Energy?

Washington has few fossil fuel resources, but with five refineries, the state is a principal refining hub for the Pacific Northwest. In fact, according to the Energy Information Administration, the refining capacity in Washington is about 627,850 barrels/day. While these refineries receive most of their oil each day via tanker from Alaska, declining production there means that Washington’s refineries will soon become increasingly dependent on crude imports from Canada and elsewhere. Additionally, the Trans Mountain Pipeline from Alberta supplies more than one-tenth of Washington’s crude oil.

Washington gets some of its oil from Saudi Arabia, Angola and Argentina as well, but more than 25 percent of its total haul comes from Canada – supplies that would be targeted for elimination under an LCFS. The chart below captures the relevant percentages.

LCFS Impact on Washington State

Since Washington receives more than 25 percent of its crude from Canada, a quarter of the state’s secure, affordable oil supply would be threatened under an LCFS. Also, about 10 percent of the state’s gasoline – refined in Montana, but derived from Canada’s oil sands – would also be prevented from crossing the eastern border.

How would Washingtonians make up the difference? Increasing imports from the Middle East, currently residing at nine percent of the state’s energy consumption or relying on the use of hydrogen and electric plug-in cars that will not be commercially viable for decades.

And what about jobs? Refiners in Washington directly employed 2,003 workers in 2007 (latest numbers), and indirectly supported another 20,000. They paid out more than $400 million in wages. And they sent nearly that same amount to Olympia in the form of sales, excise, occupation and sundry other taxes.

Tags: Canadian crude, Consumer Energy Alliance, LCFS, Low Carbon Fuel Standard, SecureOurFuels.org
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CEA Continues to Educate Consumers about Negative Impacts of an LCFS Across the Nation

Monday, February 1st, 2010

Last week various newspapers reported about the special election in Massachusetts and how it could affect the success of President Obama’s policy agenda, including climate change. In fact, The Winnipeg Free Press reports the following in their article, “Obama’s loss is our gain”:

The political setback will stop Obama’s cap-and-trade bill on greenhouse gas emissions dead in its tracks. This is excellent news for Canada. The so-called Waxman-Markey Bill, which was passed by the House by a very narrow margin, would dole out green energy subsidies that various states and municipalities are planning to use to discriminate against Canadian energy imports. It would also designate Canada’s oilsands as “dirty fuel” and prohibit the U.S. federal government from using it. Even if Canada set up a similar system of cap-and-trade, the chances that American lobbies would start trade action is huge. With good sense and prudence, Ottawa is trying to make Canadian rules as similar as possible to the American regime.

While the status of climate legislation in Washington, D.C. may now be questionable, the threat of Low-Carbon Fuel Standards (LCFS) still exists. Indeed, many states and regions across the nation are working to pass LCFS proposals, particularly in the Mid-West, the Northeast and the Mid-Atlantic.

This is why Consumer Energy Alliance (CEA) continues to work to educate, inform and engage American consumers about the economic and national security threats that an LCFS poses. Oilprice.com reports these points in their story, “Canada’s Alluring Energy Supply Regaining it’s Lustre Despite Continued Criticism”:

Some American government officials, including a group of Northeastern governors, are beckoning for a low-carbon fuel standard that would stem Canadian crude oil from spilling into the United States, said Travis Windle, spokesman for the Washington-based Consumer Energy Alliance. The non-partisan group, which advocates wise energy use, is pushing a national advertising campaign about the low-carbon fuel standard.

On the whole, the United States is bent on beefing up its oil ties, Windle noted, adding the reserves account for 20 percent of American energy. Last August, the State Department gave the go-ahead for a pipeline called the Alberta Clipper to carry crude from Canada to U.S. refineries in Wisconsin.

Despite the fact that the Alberta Clipper pipeline is being developed to carry crude from Canada to U.S. refineries in Wisconsin, the Badger State is currently working to pass an LCFS proposal that would actually block these fuel supplies from entering the state.

Fortunately for Wisconsinites, Scott Manley with Wisconsin Manufacturers and Commerce has been leading the charge on this issue in Wisconsin and educating consumers about the negative consequences of this proposal. In fact, he shares his concerns with Wisconsin’s global warming legislation in the following Green Bay Press Gazette op-ed:

The so-called Low Carbon Fuel Standard would cost Wisconsin motorists more than $3.2 billion in higher gas prices according to the WPRI study. This global warming gas tax could cost consumers as much as 61 cents per gallon according to a study by the Marshall Institute. All told, these expensive policies are projected to cost each Wisconsin family more than $1,000 each year by the time they are fully implemented. Worse yet, the supporters of this misguided bill have not identified any meaningful benefit that would be achieved relative to global temperatures or climate.

Last month Manley took to the pages of the Milwaukee Journal Sentinel to highlight the devastating economic effects associated the LCFS legislation that was recently introduced. In a column entitled “Global warming bill kills state jobs,” Manley writes:

Wisconsin families cannot afford these tremendously expensive policies given our current recession and fragile economy. Wisconsin has the single-most manufacturing-intensive economy in the country. Our family-supporting manufacturing jobs pay an average wage of $62,959 – more than 35% higher than the state average. Unfortunately, we already have lost 160,000 manufacturing jobs in the past decade, including 60,000 jobs lost since 2008 alone.

In light of the critical effects that an LCFS could have on jobs and the economy in the U.S., the governors in the Mid-West, Northeast and Mid-Atlantic that are currently considering an LCFS – as well as leaders in Washington – should consider these facts and stop these policies while they still can.

Tags: Alberta Clipper, Consumer Energy Alliance, Economy, LCFS, Low Carbon Fuel Standard, Wisconsin Manufacturers & Commerce
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As Families, Seniors Struggle With Rising Home-Heating Costs, CEA Continues Fight for Affordable, Secure Energy

Tuesday, January 26th, 2010

Last week, Consumer Energy Alliance (CEA) and the Council on Hemispheric Affairs (COHA) teamed up to defend struggling consumers from higher gas and home-heating fuel costs by hosting a call with the media to highlight the dangerous consequences – from an economic and national security perspective – with Low-Carbon Fuel Standard (LCFS) proposals.

During the call, CEA’s vice president and in-house LCFS expert Michael Whatley and COHA fellow Shantel Beach underscored key findings of COHA’s new report. They also discussed the impacts that an LCFS could have on U.S. energy security and fuel and home-heating costs, as well as its potential effects on economic competitiveness.

Following the conference call, Mitch Potter with the Toronto Star reports this:

Consumer Energy Alliance…sounded a warning this week on the dangers the regional efforts pose to oil imports from Alberta, noting that Washington could embrace the measures as an alternative to cap-and-trade legislation and instead push for a federal low-carbon fuel law. The warning echoed a report last month by Washington’s Council on Hemispheric Affairs, which said strict environmental measures that discriminate against Alberta oil could push Canada in search of other markets.

America’s loss [under an LCFS] would likely be China’s gain, the [CEA’s] vice-president Michael Watley told the Star, pointing to the development of Enbridge’s proposed 1,200-kilometre Northern Gateway pipeline, a project to link the oil sands to Kitimat on the northern B.C. coast, placing Alberta oil on tap for the thirsty Asian market.

In fact, this “thirsty Asian market” may soon find more resources to secure (that would have otherwise been delivered to U.S. consumers). Last week, Canada’s Environment Minister Jim Prentice and Gaétan Caron, chair and CEO of the National Energy Board, announced the establishment of a three-member joint panel for the environmental and regulatory review of the proposed Northern Gateway Pipeline project.

The Calgary Herald reports this under the headline “Governator’s fuel plan could cause ‘collateral damage’ to U.S.”:

[Shantel Beach] explained that if Alberta can’t sell its oil to the U.S., it has a willing market in China, which has a 60 per cent stake in Athabasca Oil Sands Corp.’s MacKay and Dover oilsands deposits. Regulatory approval for the Northern Gateway Pipeline to the West Coast would be a spigot the Chinese would welcome.

Low-carbon fuel legislation will do nothing to prevent global warming and will only jeopardize America’s fuel security, according to Shantel Beach, a researcher with the Washington, D.C.,-based Council on Hemispheric Affairs (COHA). Michael Whatley, vice-president of the oil-industry backed Consumer Energy Alliance, joined Beach on the conference call and said this about LCFS legislation: “If we are talking about policies that are going to take (18 per cent of U.S.) imports off the table, you’re talking about major, major ramifications in terms of U.S. fuels policy.

Whatley characterized LCFS schemes as “a cap-and-trade system for transportation fuels.” He also discussed the states and regions across the nation that are working to pass LCFS proposals, particularly in the Mid-West, the Northeast and the Mid-Atlantic.

In the article “Critics Of States’ Low-Carbon Fuel Rules Raise CO2 Lifecyle Concerns,” Inside EPA reports this about state LCFS efforts, and CEA’s efforts to help protect consumers from unstable and higher energy costs:

CEA’s Michael Whatley said that state and regional LCFS, such as a Northeast/Mid-Atlantic effort under way for transportation fuel and heating oil that is designed to force a national LCFS, are “moving forward seriously and moving forward fast.” … Whatley said the regional and state efforts “are more important to date,” given congressional action is unlikely.

CEA said it is “strongly opposed to efforts to implement [a LCFS] for the sake of discriminating against fuels derived from unconventional sources such as heavy oil, oil shale and the Canadian oil sands.” … And it warns neither a regional nor national LCFS would have a measurable effect on production of Canadian oil sands because “producers will simply shift those supplies to other markets in the event of such a ban.”

As concerned and struggling consumers continue to learn more about the economic and national security threats posed by LCFS policies, the stronger the opposition to such policies continues to mound. In fact, opposition to global warming laws (and LCFS) has dramatically increased in California recently, which was the first state to pass an LCFS. According to the California Chronicle, the increase in opposition “was based on concerns that the measure will kill jobs, increase costs and further erode the state´s fragile economy” – all relevant concerns for American consumers. The Pew Research Center study released similar polling numbers this week, as well. American consumers are rightfully concerned most about jobs and the economy, which would be hurt even more under an LCFS.

In order to stop job-killing LCFS policies, CEA members and others concerned about higher prices at the pump and driving down our nation’s dependence for oil from unfriendly regions of the world must not give up this fight. We need more energy – of all forms – and we need to use the energy sources we have more wisely at the same time. Send this message to Congress, if you agree.

Tags: Consumer Energy Alliance, Council on Hemispheric Affairs, LCFS, Low Carbon Fuel Standard
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CEA, COHA Tag-Team Efforts to Defend Struggling Consumers From Higher Gas, Home-Heating Prices

Friday, January 22nd, 2010

Consumer Energy Alliance’s (CEA) vice president and in-house oil sands expert Michael Whately and Shantel Beach, a Council on Hemispheric Affairs (COHA) fellow, discussed the dangerous consequences associated with Low-Carbon Fuel Standard (LCFS) proposals yesterday with the media. The pair highlighted the threats to the energy security, impacts on fuel and home-heating costs for consumers and U.S. economic competitiveness.

Whatley characterized LCFS as “a cap-and-trade system for transportation fuels.” He also discussed the states and regions across the nation that are working to pass LCFS proposals, particularly in the Mid-West, the Northeast and the Mid-Atlantic.

COHA’s Beach summarized her recent report entitled “The U.S. Targets Canada’s Oil Sands: Washington Should Tread Lightly with its Environmental Legislation, so that Carbon Cuts will not Come at the Expense of Canada’s Energy Sovereignty or U.S. Energy Security,” which finds:

Canada can and likely will push back, especially since China is more than happy to step in and purchase oil … if the U.S. chooses not to. That prospect is taking on enhanced credibility as planning proceeds for the Northern Gateway pipeline project to carry oil sands petroleum to Kitimat in northern B.C. for potential shipment to Asia.

In addition to COHA’s concerns about China moving forward to aggressively acquire affordable and secure Canadian energy reserves if the U.S. decides to turn its back on its closest and most strategic trading partner, Beach raised concerns with an LCFS:

Under a national LCFS program, all vehicles would be required to fill-up with a blended fuel. As the production of bio-fuel in the U.S. is not currently enough to satisfy a one-to-one ratio blend with gas coming from the oil sands, in the short-term the blend will likely favor conventionally extracted oil, at Canada’s expense. Due to Canada having less conventional oil reserves than oil sands reserves, a shift in U.S. demand toward conventional oil would redirect trade away from Canada. If the U.S. comes to depend less on Canada’s oil sands, it will surely come to depend more on conventional oil reserves from less dependable countries overseas.

In fact, this same theme was recently touched on by The Globe and Mail in their article, “Why the U.S. needs all the tar sands oil it can get,” which says:

Governor Arnold Schwarzenegger and his Midwestern colleagues had better think twice before banning carbon-dirty fuels such as the oil made from Canadian tar sands. If they don’t like the fuel Canada has to offer, their only other choice is to get off the road entirely. Like it or not, synthetic oil from Alberta’s tar sands is going to figure ever larger at American fuel pumps in the future (provided that it isn’t siphoned off to China by a pipeline to the west coast first).

Mr. Schwarzenegger and his fellow governors should realize one thing before they ban dirty fuels. The reason the United States will be so dependent on Canadian tar sands is that there ain’t a whole lot else left.

Despite the doubt that may exist about the likelihood of a pipeline being built to the West Coast to allow China access to the Canadian oil sands, that project is moving forward. In fact, this week Canada’s Environment Minister Jim Prentice and Mr. Gaétan Caron, chair and CEO of the National Energy Board, announced the establishment of a three-member joint review panel for the environmental and regulatory review of the proposed Northern Gateway Pipeline project.

While this is good news for China, since they are eager to secure as much of this energy as possible, the U.S. is at risk of losing almost one-fifth of our secure, affordable and reliable fuels from Canada.

This is why CEA continues to work to educate, inform and engage American consumers about the economic and national security threats that an LCFS poses. Stressed by Whatley and Beach in yesterday’s media call, an LCFS will threaten American jobs, increase greenhouse gas emissions, deepen our dependence on unstable regions of the world and drive prices at the pump even higher.

Tags: CEA, China, Consumer Energy Alliance, Council on Hemispheric Affairs, Economy, Governor Schwarzenegger, LCFS, Low Carbon Fuel Standard
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Maryland, Wisconsin Policymakers, Experts Reject Low-Carbon Fuel Standards

Monday, January 18th, 2010

The recent agreement by 11 Northeast and Mid-Atlantic state governors to begin the formal process of implementing a job-killing Low-Carbon Fuel Standard (LCFS) this drawing major criticism from policymakers and experts that understand that such scheme will lead to higher prices at the pump for struggling consumers and a deeper, more dangerous dependence on unstable regions of the world to meet our nation’s energy needs.

Maryland Delegate Richard Sossi – a member of the Environmental Matters Committee – recently expressed his concerns with this LCFS in a Star-Democrat column. In his piece entitled “Maryland comes out far worse under an LCFS,” Delegate Sossi – whose Eastern Shore district encompasses Caroline, Cecil, Kent & Queen Anne’s Counties – writes:

Remarkably, with gasoline and home heating prices currently the highest they’ve been all year, 10 Northeast and mid-Atlantic states joined Maryland last month down the treacherous road of implementing a future LCFS. In each case, the governors who signed this pact cited the LCFS as a “market-based” approach to lowering the carbon content of fuel – a policy that is undeniably attractive, notwithstanding the scientific fact that it, as it’s presently being sold to the public, cannot and will not be accomplished.

Of course, what will be accomplished, and rather quickly, is that the existing network that Maryland depends upon to access its energy will be fundamentally reshaped – and certainly not for the better. The good news, if there is any, is that this ship has not yet permanently sailed: Maryland still has time to consider these implications, and, as of this writing, still has time to back away from the agreement our governor signed in the waning hours of 2009.

And in Wisconsin, Scott Manley of the Wisconsin Manufacturers & Commerce (WMC) took to the pages of the Milwaukee Journal Sentinel to highlight the devastating economic effects associated the LCFS legislation that was recently introduced. In a column entitled “Global warming bill kills state jobs,” Manley writes:

The so-called Low Carbon Fuel Standard would cost Wisconsin motorists more than $3.2 billion in higher gas prices … tax could cost consumers as much as 61 cents per gallon.

All told, these expensive policies are projected to cost each Wisconsin family more than $1,000 each year by the time they are fully implemented. Worse yet, the supporters of this misguided bill have not identified any meaningful benefit that would be achieved relative to global temperatures or climate.

Wisconsin families cannot afford these tremendously expensive policies given our current recession and fragile economy. Wisconsin has the single-most manufacturing-intensive economy in the country. Our family-supporting manufacturing jobs pay an average wage of $62,959 – more than 35% higher than the state average. Unfortunately, we already have lost 160,000 manufacturing jobs in the past decade, including 60,000 jobs lost since 2008 alone.

In fact, last month the WMC and 23 of the state’s largest business groups, representing contractors, homebuilders and retailers, wrote Gov. Doyle and legislative leaders detailing their concerns about this proposal, including the LCFS provision. Here’s a key excerpt from that letter:

The proposed Low Carbon Fuel Standard would increase costs to Wisconsin motorists by an additional $3.279 billion by 2020.

Low Carbon Fuel Standard (LCFS). Another California idea that makes little sense for Wisconsin is adopting a California-type LCFS aimed at restricting our use of Canadian oil. Unlike California, Wisconsin relies on Canadian crude oil to produce the majority of our transportation fuel. By raising costs an estimated $3.3 billion for motorists, a LCFS will hit Wisconsin consumers at a time when we can least afford it.

Hopefully the governors in the Mid-West, Northeast and Mid-Atlantic that are currently considering an LCFS – as well as leaders in Washington – will consider these facts. In order to stop LCFS policies, it is critical that concerned policymakers and consumers continue to send Congress the message that an LCFS will kill American jobs, increase greenhouse gas emissions, deepen our dependence on unstable regions of the world and drive prices at the pump even higher.

Tags: Consumer Energy Alliance, Gov. Doyle, Low Carbon Fuel Standard, Richard Sossi, Wisconsin Manufacturers & Commerce
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Left-Leaning Think Tank, Labor Union Throw Flag on Job-Killing LCFS Scheme

Tuesday, January 12th, 2010

Today, the Vancouver Sun’s Barbara Yaffe reports that a liberal Washington, D.C. think-tank recently released a report “urging the Obama government to think twice before introducing environmental measures that would disadvantage Alberta’s oil sands.” The Council on Hemispheric Affairs, or COHA, warns that “Washington may find that if it pushes too hard or too fast with carbon-cutting legislation targeting the oil sands, its friendly neighbor might finally grow tired of being taken for granted when it comes to oil.”

The report, enitled “The U.S. Targets Canada’s Oil Sands: Washington Should Tread Lightly with its Environmental Legislation, so that Carbon Cuts will not Come at the Expense of Canada’s Energy Sovereignty or U.S. Energy Security,” finds that:

Canada can and likely will push back, especially since China is more than happy to step in and purchase oil … if the U.S. chooses not to. That prospect is taking on enhanced credibility as planning proceeds for the Northern Gateway pipeline project to carry oil sands petroleum to Kitimat in northern B.C. for potential shipment to Asia.

In addition to COHA’s concerns about China moving forward to aggressively acquire affordable and secure Canadian energy reserves if the U.S. decides to turn its back on its closest and most strategic trading partner, the think-tank highlights concerns with a Low-Carbon Fuel Standard (LCFS):

If enacted, a national LCFS would disproportionately target Canada’s oil sands sector. While at first glance it may seem like a good idea to enact legislation incentivizing the consumption of low life-cycle carbon fuels, these policies carry with them negative consequences for U.S. energy security.

Under a national LCFS program, all vehicles would be required to fill-up with a blended fuel. As the production of bio-fuel in the U.S. is not currently enough to satisfy a one-to-one ratio blend with gas coming from the oil sands, in the short-term the blend will likely favor conventionally extracted oil, at Canada’s expense. Due to Canada having less conventional oil reserves than oil sands reserves, a shift in U.S. demand toward conventional oil would redirect trade away from Canada. If the U.S. comes to depend less on Canada’s oil sands, it will surely come to depend more on conventional oil reserves from less dependable countries overseas.

As COHA highlights in their report, eleven Northeastern states recently signed agreements to implement a regional LCFS to ban Canadian energy from reaching consumers in their states. A host of other states are also considering similar job-killing LCFS policies. However, some states are realizing the consequences – both from an energy supply and economic competitiveness standpoint – associated with an LCFS. In fact, today’s New Haven Register reports on Consumer Energy Alliance’s (CEA) campaign against an LCFS. In the article “Low-carbon initiative could pose problems for state”, Angela Carter writes:

Michael Whatley, vice president of the nonprofit Consumer Energy Alliance, said Monday that the transportation sector does not yet have the infrastructure that would be needed if a low-carbon fuel standard is adopted.

“Connecticut doesn’t have any refining factories,” which would make bringing alternative fuel into the state costly, he said, adding that there are not enough alternative vehicles available, or newly designed pumps or electric charging stations in the market. “Every gas pump in the Northeast would have to be replaced.” Whatley said the alliance is concerned that petroleum supplies from the Canadian oil sands, southern U.S. and Mexico would be “off the table.”

And in Wisconsin, where LCFS legislation was recently introduced, labor unions are speaking out about how this proposal that will increase prices at the pump for struggling consumers and deepen America’s dependence on unstable regions of the world to keep our economy moving. Terry McGowan, of the International Union of Operating Engineers Local 139, writes this in a Sheboygan Press op-ed entitled “Oil Sands: Jobs, energy security at stake”:

Despite our national and energy security considerations, the future of Canadian Oil Sands production for the United States is not assured. Certain groups promote low-carbon fuel standard legislation by arguing that American refineries should not process crude oil with a higher carbon footprint than that of petroleum derived from places like the Middle East. While Oil Sands’ carbon footprint is slightly higher than crude from places like Saudi Arabia, it is comparable to oil found in Venezuela, Mexico and California.

The International Union of Operating Engineers Local 139 believes that, because the oil and natural gas industry is vital to American energy security and job supply, we should encourage Canadian Oil Sands production as part of a sound energy strategy.

As states in the Northeast and Midwest toil with enacting far-reaching LCFS schemes akin to California’s, groups like COHA and labor unions are speaking out about the harmful effects that an LCFS will impose throughout the U.S. In order to stop LCFS policies, it is critical that concerned consumers continue to send Congress the message that an LCFS will kill American jobs, increase greenhouse gas emissions, deepen our dependence on unstable regions of the world and drive prices at the pump even higher.

Tags: Angela Carter, Barbara Yaffe, Consumer Energy Alliance, Council on Hemispheric Affairs, International Union of Operating Engineers Local 139, LCFS, Low Carbon Fuel Standard, NESCAUM, Shantel Beach
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Affordable Energy Supplies In Gov. Doyle’s Crosshairs

Friday, January 8th, 2010

Yesterday, Wisconsin Governor Jim Doyle announced a new climate change bill for the Badger state. According to the Milwauke Journal-Sentinel, Doyle’s proposal aims to “expand renewable energy, energy efficiency and open the door to new nuclear reactors.” However, Doyle neglected to mention that his climate change bill – Assembly Bill 649 – also contains a job-killing Low-Carbon Fuel Standard.

Fortunately, business groups is the state are standing up for jobs, consumers and Wisconsin families by fighting this proposal that would increase prices at the pump across the board. In fact, the state’s largest business lobbying group, the Wisconsin Manufacturers and Commerce (WMC), said that these new mandates will “increase energy costs and hurt businesses.” The Associated Press quotes Scott Manley, WMC environmental policy director:

“With 9 percent unemployment, we should be focusing on ideas to create jobs like cutting taxes, controlling spending, controlling red-tape, and clamping down on frivolous lawsuits,” said Scott Manley, director of environmental policy for WMC.

Last month, the WMC and twenty-three of the state’s largest business groups, representing contractors, home builders and retailers, sent Gov. Doyle and lawmakers a letter detailing their concerns about this proposal, including the LCFS provision. They even cited a study that found the proposal could cost more than 43,000 jobs and billions of dollars.

The groups also highlighted the negative economic impacts associated with an LCFS, which is also being considered in Congress. As you may know, an LCFS would effectively ban affordable and secure Canadian energy reserves – which currently meets nearly 50 percent of the Badger state’s energy needs. And the group lays this out to the task force in their letter:

The proposed Low Carbon Fuel Standard would increase costs to Wisconsin motorists by an additional $3.279 billion by 2020.”

Low Carbon Fuel Standard (LCFS). Another California idea that makes little sense for Wisconsin is adopting a California-type LCFS aimed at restricting our use of Canadian oil. Unlike California, Wisconsin relies on Canadian crude oil to produce the majority of our transportation fuel. By raising costs an estimated $3.3 billion for motorists, a LCFS will hit Wisconsin consumers at a time when we can least afford it.

In addition to this letter, James A. Buchen, WMC vice president, writes this in a recent Milwaukee Journal Sentinel op-ed entitled ‘Low carbon fuel tax is lose-lose’:

A Low Carbon Fuel Standard sounds harmless enough, but this misguided policy would penalize Wisconsin’s dominant source of motor fuel: Canadian crude oil. Studies have shown that such a standard will raise gas prices … an LCFS would also threaten many of our state’s family-supporting manufacturing jobs that supply the Canadian oil industry.

Because Canadian oil is located on our own continent and comes from one of our closest allies, it represents a stable and secure source of energy for Wisconsin.

Unfortunately, an LCFS would punish Canadian oil because it requires more energy to produce, refine and bring to market than “lighter” forms of crude oil. Worse yet, an LCFS would not even reduce Wisconsin greenhouse gas emissions because gasoline refined from Canadian crude oil burns just the same as other conventional sources of gasoline.

Lawmakers must consider whether it makes sense to enact an LCFS and trade friendly Canadian oil for a greater reliance on OPEC and Middle East oil.

Wisconsin consumers, their pocket books and the state’s energy security are all under attack by this LCFS scheme. That’s why it is so critical that consumers continue to send Congress and Gov. Doyle the message that an LCFS will kill American jobs, increase greenhouse gas emissions, deepen our dependence on unstable regions of the world to keep our economy moving and lead to even higher prices at the pump.

Tags: Canadian crude, Consumer Energy Alliance, Governor Jim Doyle, LCFS, Low Carbon Fuel Standard, Wisconsin Manufacturers and Commerce
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Wicked Cold: Draft MOU Asks Northeast Guvs to Endorse Future of Higher Gas, Heating Oil Prices

Monday, December 28th, 2009

Consumer Energy Alliance sends letter to 11 Northeast governors asking officials to look before they leap on regional LCFS

WASHINGTON – The imposition of a California-style Low-Carbon Fuel Standard (LCFS) on 11 Northeast and mid-Atlantic states would dramatically restrict consumers’ access to local and affordable supplies of motor and home heating fuel – all without doing a thing to limit global greenhouse gas emissions. That’s the message conveyed this week by Consumer Energy Alliance (CEA), as the governors of these states decide whether to formally commit their constituents to a plan that could pave the way for higher prices at the pump, and sharp reductions in the availability of home heating oil.

“An LCFS isn’t about reducing carbon emissions, it’s about restricting access,” said CEA vice president Michael Whatley, who represented the organization in two regional LCFS hearings held earlier this winter. “Unfortunately, for residents of the Northeast, that means less access not only to affordable gas and diesel fuel, but to the critical fuel oils that are used to heat more than two million homes in the region.”

Earlier this month, CEA obtained a draft copy of the LCFS Memorandum of Understanding (MOU) currently in circulation among the 11 states involved in the Northeast States for Coordinated Air Use Management (NESCAUM), a group actively lobbying for an LCFS. In it, states are asked to endorse the statement that an LCFS is “a market-based, fuel-neutral program to address the carbon content of fuels” – even though in reality the plan is government- (not market-) directed, fuel-discriminatory (especially against those from Canada), and does nothing to reduce the carbon content of fuel (which is constant).

Additionally, the MOU demands that states “commit to promote and support a national LCFS program,” the clearest admission yet that a regional LCFS scheme cannot succeed unless its burden is extended via federal mandate to competitors in neighboring states. “That’s been the purpose of this effort all along,” added Whatley. “In regional stakeholder meetings and in the draft MOU, NESCAUM has stated its ultimate goal is to implement a bad regional policy that will push the federal government into passing a national mandate – even if it means the Northeast ends up isolating itself from critical national and international fuel markets.”

According to reports, NESCAUM officials have asked each state’s governor to sign the MOU by December 31, 2009. In anticipation of that deadline, CEA last week sent each of the 11 governors participating in the NESCAUM effort a letter outlining several key considerations related to an LCFS – from the logistics involved in converting hundreds of thousands of vehicles to flex-fuel capable, to the realities inherent in the fact that 80 percent of transportation sector carbon emissions comes from the combustion of fuel, not the lifecycle components an LCFS will supposedly address.

Tags: Consumer Energy Alliance, Low Carbon Fuel Standard, NESCAUM
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