Simon Mui of the Natural Resources Defense Council finds fault with the findings of the Boston Consulting Group’s study of California’s Low Carbon Fuel Standard. He says the report is flawed because it assumes there won’t be enough low carbon intensity biofuels available to meet the standard.
He’s right on that point. He’s wrong, however, when he says the LCFS “requires the oil industry to make investments in cleaner alternatives.” It does no such thing. The LCFS requires the oil industry to lower the carbon intensity of fuels sold in California. The only practical way to do that is to blend biofuels that have low enough carbon intensities to meet the standard.
The problem identified by the BCG study is that it is almost certain those low carbon biofuels will not be available in sufficient quantities in time to meet the standard. When that happens, refiners will have little choice but to reduce the amount of gasoline they sell in California to avoid finding themselves out of compliance with the regulation.
It’s not a matter of who invests in alternatives fuels or how much they invest. The technology to produce these very low carbon intensity biofuels is not far enough long to provide enough supply to meet California’s enormous appetite for transportation fuels at prices consumers can afford within the time frame required by the LCFS. That’s one of the reasons we believe it is urgent that we begin a conversation about how to design policies to reduce California’s carbon emissions that are feasible.
Don’t take our word for it and don’t take Simon’s word. Read the BCG report yourself. It’s available at www.cafuelfacts.com. Tell us if you think the report is solid and how you feel about the direction California is heading with its fuels policies.