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Biofuels industry urges changes in California's low carbon fuel rules

The eyes of the world's biofuels industry were on California Thursday when the California Air Resources Board heard arguments for and against its proposal to regulate the carbon footprints of fuels.

The proposal to lower greenhouse gas emissions by 10% from all fuels used in the state by 2020, if adopted, would start next year with fuel suppliers adjusting to the new regulations and by 2011, it would mandate a gradual start towards the 10% cut.

California's Low Carbon Fuel Standard would be the world's first attempt to regulate greenhouse emissions from fuels, the Air Resources Board's chairman, Mry Nichols, said at a day-long hearing began. The new rules are expected to be a model for the EPA at the federal level, other states, and possibly the European Union.

Nichols said the Low Carbon Fuel Standard will move the state's vehicles away from dependence on gasoline and diesel toward electricity, sustainable biofuels, hydrogen and natural gas.

The proposed rules drew support from companies that would benefit from this shift -- makers of engines fueled by natural gas, those that are developing fuels from municipal waste, companies making biodiesel from used cooking oils and Pacific Gas and Electric Company.

It was opposed by trucking companies, Hispanic chambers of commerce representing small businesses and others concerned about its potential to increase business costs during a severe recession.

Some of the strongest opposition comes from the corn ethanol industry, which would have a bigger carbon footprint than gasoline because the proposed standard takes into account the amount of carbon dioxide released into the atmosphere when forests or grasslands are converted to crop production to offset the loss of land growing corn for ethanol. That indirect land calculation adds 30 points to the estimated carbon dioxide equivalent from corn ethanol, bringing the average for Midwest corn ethanol to 99.5 grams of carbon dioxide equivalent for each megajoule of energy. The average for California gasoline is 95.86.

General Wesley Clark, co-chairman of the ethanol trade group, Growth Energy, said that ethanol was not being treated fairly.

"There are indirect effects for many fuels but the only indirect effects that have been looked at is the indirect land use for biofuels," he said.

He cited a recent study by the University of Nebraska that showed the use of the military to protect oil supplies in the Middle East, which increases the carbon output associated with gasoline. And in Brazil, deforestation has been cut in half during the same period when corn ethanol production was expanding.

The use of indirect land use for ethanol was also opposed by the Renewable Fuels Association and groups that represent cellulosic ethanol development, including the New Fuels Alliance.

Using indirect land use drew support from at least one oil company, Chevron, and several environmental groups, including Union of Concerned Scientists, Friends of the Earth and the Natural Resources Defense Council.

Simon Mu, a scientist with NRDC told the Air Resources Board that other scientists who reviewed the way the board’s staff work and agreed with its analysis of indirect land use.

Mu showed a slide that compared corn ethanol's indirect effects with other fuels. "The story on indirect impacts for other fuels is there isn't an impact so far," Mu said.

Board chairman Nichols responded, "Thank you. That's a useful chart."

The eyes of the world's biofuels industry were on California Thursday when the California Air Resources Board heard arguments for and against its proposal to regulate the carbon footprints of fuels.

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