Oil Grandfathered Under CA LCFS???

Over the last several weeks, NFA has expressed concern over the California Air Resources Board's proposal to grandfather petroleum under the CA LCFS. The proposal stands in stark contrast to how they treat biofuels, and runs counter to the idea that the LCFS is a performance-based standard.

We sent the following email to northeast LCFS stakeholders, asking for this type of approach to be rejected by northeast policymakers.

As you may know, the New Fuels Alliance (NFA) has expressed concerns about the way in which oil is treated in the CA LCFS. The issue stems from the potential lack of supply chain accountability for petroleum pathways. The problem resurfaced last Monday (3/29) in the context of the first Crude Oil Screening Work Group mtg hosted by the CA Air Resources Board (ARB). The work group is part of the CA LCFS process and will develop screening protocols for high carbon intensity crude oil (ie crude that has a production and transport value greater than 15g/MJ).

During the meeting, ARB announced its intent to “grandfather” all petroleum fuel pathways originating in any one of the 8 countries/regions (CA/AK/Saudi Arabia/Ecuador/Iraq/Brazil/Mexico/Angola) that comprise the 2006 petroleum regulatory baseline. This controversial policy decision would result in heavy crude qualifying as the lower carbon baseline fuel, even if the actual crude has a significantly higher carbon profile. It is also worth noting that this gives oil an additional “free pass” in the context of the CA LCFS. As noted in an earlier memo from NFA, the current LCFS allows petroleum derived from thermally-enhanced oil recovery to receive the lower 96g/MJ average petroleum score, even though its actual emissions are 15 percent higher than 96 g/MJ. The latest proposal from ARB would allow oil from the 8 grandfathered countries/regions, irrespective of its actual carbon intensity value, to bypass the high carbon intensity crude oil screening process that will be developed as part of the Crude Oil Screening Work Group. These 8 regions supply 95% of CA’s petroleum market.

The New Fuels Alliance strongly opposes this policy because it is in direct conflict with the goals of the LCFS, namely to be performance-based, reduce the carbon intensity of fuels, and to promote clean technologies. We urge policymakers and regulators in the Northeast/Mid-Atlantic region to build a program that properly enforces supply-chain accountability for all fuels and closes loopholes for oil.

The ARB website for this work group is available at:
http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm