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California Governor Plans To Cut Carbon Emissions From Cars January 18, 2007

Posted by notapundit in US News.
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LOS ANGELES (Dow Jones)–California could require gasoline refiners and marketers to start cutting the carbon content of gasoline sold in the state as early as 2008, under an executive order the governor signed Thursday.

The order, which aims to cut greenhouse gas emissions from gasoline and other vehicle fuels, is part of the state’s strategy to fight global warming, said Gov. Arnold Schwarzenegger. It establishes a standard under which the carbon content of California’s passenger vehicle fuels would be cut by at least 10% by 2020.

“Like the rest of the nation, California relies excessively on oil to meet its transportation needs,” Schwarzenegger said in a statement. “In fact, 96% of our transportation fuel is oil. And that means our transportation fuels are responsible for more than 40% of California’s greenhouse gas emissions.”

The new standard would require that marketers sell a mix of fuel in California that meets a declining standard for greenhouse gas emissions. Under the plan, lower-carbon fuels would replace 20% of California’s gasoline consumption.

A market-based mechanism would be included to “allow providers to choose how they reduce emissions.” Refiners and marketers could purchase and blend more low-carbon ethanol into gasoline products, or purchase credits from electric utilities supplying low-carbon electricity to electric passenger vehicles, to satisfy the standard.

Market participants were waiting to see more details.

“It appears to establish a broad-based method to accomplish the reduction of greenhouse gases,” said one gasoline marketer. “It’s more like setting a standard in which a large number of parties can participate.”

The California Energy Commission, the University of California and other agencies will develop a draft compliance schedule to meet the 2020 carbon reduction goal. The California Air Resources Board will consider the plan as an “early action” item under California’s climate change law passed last year. The Air Resources Board is expected to adopt a plan by June and begin a regulatory process in the summer to implement the new low-carbon fuel standard. The new standard will be completed no later than December, Schwarzenegger said.

The new standard will create a fertile environment for a growing alternative fuel market, said David Crane, Schwarzenegger’s special advisor for jobs and economic growth.

“This sets off a sustainable competition among all potential players – pure electric (cars), plug-in hybrid electric (cars), compressed natural gas, hydrogen, ‘clean diesel’ and ethanol,” Crane said. “None of those things will happen unless people get comfortable that there’ll be infrastructure to allow it to happen.”

The new standard will not target trucks, although they will benefit from what the governor expects will be a growing array of alternative fuels from which to choose, Crane said.

By Ken Clark and Cassandra Sweet, Dow Jones Newswires

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