The Tar Sands Battle Continues in California Courts

California’s low-carbon fuel stan­dard is the world’s first attempt to require oil sup­pli­ers to slash the car­bon foot­print of their motor fuels, mea­sured not just by emis­sions from tailpipes but across their full life­cy­cle, from extrac­tion to com­bus­tion. Eleven Northeast and Mid-Atlantic states, and the European Union, are closely track­ing California’s case because they are work­ing to adopt sim­i­lar rules.

The state’s influ­en­tial Air Resources Board, or CARB, adopted the Low Carbon Fuel Standard in 2009 as part of its land­mark global warm­ing law, A.B. 32. The agency was sup­posed to begin enforc­ing the rule on Jan. 1, 2012. But oil com­pa­nies, which say it unfairly penal­izes high-carbon fuels like oil sands crude, have fought furi­ously to kill the stan­dard. And on Dec. 29, a fed­eral judge in Fresno, Calif., handed them a vic­tory by rul­ing that CARB can’t enforce the mea­sure until an out­stand­ing law­suit by the oil indus­try and ethanol advo­cates is resolved in 2013.

The judge, Lawrence J. O’Neill, a Pres. George W. Bush appointee, said the rule uncon­sti­tu­tion­ally dis­crim­i­nates against out-of-state fuel sources and reg­u­lates com­mer­cial activ­ity out­side California’s borders.

A week later, CARB appealed O’Neill’s deci­sion and asked a fed­eral court in San Francisco to reverse it. An agency spokesper­son told InsideClimate News this week that CARB will request a stay of the injunc­tion “very shortly” as it awaits a deci­sion on the appeal. National envi­ron­men­tal groups Natural Resources Defense Council (NRDC) and the Conservation Law Foundation are pro­vid­ing legal help to CARB.

Both sides are play­ing for huge stakes.

If CARB and the con­ser­va­tion­ists win the appeal, the agency can imme­di­ately man­date that oil importers, refin­ers and fuel blenders meet the tar­get they’ve set for 2012—to cut the “car­bon inten­sity” of their fuel mix by a quar­ter of one per­cent. (The pol­icy calls for a 10 per­cent reduc­tion by 2020.)

That could send a sig­nal to other states and coun­tries that are wait­ing on California to fol­low suit. For months, EU states have been locked in their own bat­tle over whether to imple­ment the EU Fuel Quality Directive that labels fuel imports from the oil sands as “dirty,” with Canada accused of heavy lob­by­ing to delay action.

But if CARB loses the appeal—and the oil and ethanol indus­tries ulti­mately win their law­suit in 2013—it could delay California’s low-carbon fuel stan­dard for years and dis­cour­age sim­i­lar efforts elsewhere.

Both oppo­nents and sup­port­ers of the rule say that what­ever hap­pens will have a big impact on the mar­ket for Alberta’s tar sands in California and across the world.

They give two main rea­sons why. First, the tar sands indus­try is eye­ing California, the nation’s third-largest refin­ing mar­ket, as a cru­cial future des­ti­na­tion for its oil. The low-carbon rule would con­strict that mar­ket, sug­gested Charles Drevna, pres­i­dent of the National Petrochemical and Refiners Association, an oil indus­try advo­cacy group. “It would deny the American peo­ple access to abun­dant sup­plies of oil derived from oil sands in Canada,” he said via email.

Second, the stigma from California that oil sands are dirty could make other oil-importing states and coun­tries reluc­tant to invest in or deepen depen­dence on the fuel source, given ris­ing pub­lic con­cern world­wide over oil and gas safety and inac­tion over cli­mate change.

Click here to read the rest of this arti­cle at InsideclimateNews.com.