By Karen Gullo, Bloomberg News
Fresno, Ca, January 6, 2012
- California appealed a ruling by a federal judge who
blocked the state's low-carbon fuel standard after finding that it
discriminates against out-of-state corn ethanol and crude oil and
violates the Commerce Clause of the U.S. Constitution.
The judge's decision and a related court order blocks the state
from enforcing rules discouraging refiners such as Chevron Corp.
(CVX) and Tesoro Corp. (TSO) from processing types of crude that
release more carbon when produced and transported into the state,
such as output from Canada's oil sands.
"We respectfully disagree with the court's decision," the
California Air Resources Board said in an e-mailed statement. "The
low-carbon fuel standard is an evenhanded standard that encourages
the use of cleaner low-carbon fuels by regulating fuel-providers in
California. It does not discriminate against any fuels on the basis
of geography."
The board is asking a federal appeals court in San Francisco to
reverse the judge's ruling and his order blocking the rules from
being enforced until a lawsuit challenging them is resolved. The
rules were to be enforced starting Jan. 1.
U.S. District Judge Lawrence J. O'Neill in Fresno, California, on
Dec. 29 sided with farming and oil-industry groups that argued
California's method of assigning a higher so- called carbon
intensity score to ethanol produced in the Midwest, which is
otherwise chemically and physically identical to that produced in
California, discriminates against interstate commerce.
The lower court case is Rocky Mountain Farmers Union v. Goldstene,
09-2234, U.S. District Court, Eastern District of California
(Fresno).