Scorching Summer Drives California Innovation and Biofuels

noyesBy Graham Noyes, Low Carbon Fuels Coalition
Special to The Digest

In contrast to DC’s swamp-like conditions, California’s capitol is known for its dry triple digit heat. This August, politicians and citizens alike are breathing Central Valley air scorched by dry heat and periodically thickened by wildfire smoke. The four year drought has deprived both city sculptures and lawns of the sparkle and green bestowed by fresh water.

But with less than three weeks left in its legislative session, California’s body politic is showing no signs of heat fatigue. Instead, California’s politicians and people are responding to the state’s increasingly dire symptoms of climate change with innovation, resolve, and biofuel policies.

California’s determination to recapture its milder and less fire-prone environment is best reflected by two ambitious climate and energy bills. Senator Fran Pavley, the original architect of AB 32 and esteemed environmental leader, is now advancing SB 32. SB 32 would require California to reduce its greenhouse gas (“GHG”) emissions 40% below the 1990 level by 2030 and 80% below 1990 levels by 2050.

Senator pro Tempore Kevin de Leon is pursuing a complementary measure, SB 350. SB 350 would reduce petroleum use in California by 50%, and increase energy efficiency and renewable power in the state by 50%, with all of these changes to be achieved by the year 2030.

As one might expect, some incumbent industries are responding to these measures with stark predictions of economic distress. Yet it is clear that the political landscape has changed drastically from just one year ago. “The oil industry is in deep trouble,” Governor Jerry Brown told reporters Monday at a news conference on the shore of Lake Tahoe. Oil companies “have a product that is highly destructive, while highly valuable at the same time. And we’re trying to work out the right policies,” LA Times.

The shift in biofuels policy

Looking specifically at biofuel policies, the shift is equally dramatic. A year ago, leading moderate Democrat Assembly Member Henry Perea was championing AB 69. AB 69 would have rolled back California’s Cap-and-Trade program in the fuels sector. The bill ultimately stalled in committee. As a result, on January 1, 2015, California petroleum fuel suppliers began paying about $12 per ton of CO2 emitted into California’s Greenhouse Gas Reduction Fund (GGRF). The expansion boosted GGRF revenues to a projected $2.5 billion this fiscal year.

This session, Assembly Member Perea is working to balance GGRF spending to benefit a broader range of Californians, including those living in the Central Valley. He is the sponsor of AB 1176, a bill that if approved will deliver GHG and diesel particulate reduction to communities that are disproportionally impacted by environmental hazards. AB 1176 will achieve these reductions by providing new fueling infrastructure for biomass-based diesel fuels.

New incentives for biofuel are also part of the last minute GGRF budget negotiations. While California’s general fund budget was resolved earlier this summer, the spending of Cap-and-Trade funds to reduce GHG emissions was left as an open item to be resolved by the end of the session on September 11th. The proposed budgets of the Governor, Assembly and Senate all agree that ARB’s annual funding for low carbon transportation should increase from $200M to $350M this year, but it remains unresolved whether low carbon fuel production should receive a portion of these funds.

The Low Carbon Fuels Coalition and other stakeholders are actively supporting the designation of a portion of these funds for biofuels, biogas and other low carbon fuels.

This advocacy has already proved successful at the agency level. California’s powerful Air Resources Board (“ARB”) has included funding for in-state production of low carbon renewable fuels in a concept paper describing its long-term GGRF spending plan for fiscal years 2016-17, 2017-18, and 2018-19. This proposed change in ARB’s spending plans as well as recent ARB analysis regarding petroleum reduction strategies demonstrates that ARB has heard industry input and is increasingly recognizing the importance of low carbon fuels to the state’s policy goals.

The Low Carbon Fuels Coalition is a technology neutral business association dedicated to supporting and expanding low carbon fuel policies. We look forward to working with the industry and sector specific trade associations during this crucial period. Resource materials and further information are available on our website and via our Facebook page.

This entry was posted in Biodiesel Report. Bookmark the permalink.