Though disappointed, I’m hardly surprised that some in the ethanol industry have chosen litigation over innovation. While not all ethanol is created equal, this lawsuit is about old, dirty ethanol’s attempt to stifle competition from newer, cleaner sources of fuels that can be produced right here in the U.S.. By choosing lawyers over engineers, old, dirty ethanol is headed down the same disastrous road Detroit took when it sued California over its seminal Clean Car Law (sometimes known as the Pavley Program).
Some quick background to the lawsuit. In April of 2009, the California Air Resources Board adopted the latest in a series of common sense standards to cut global warming pollution and steer the existing energy industries to a cleaner, more sustainable path. Predictably, the old, dirty ethanol industry filed both federal and state lawsuits last December. In contrast, other companies that are developing, newer, cleaner ways to make biofuels support the California program.
This first in the nation program, called the Low Carbon Fuel Standard (LCFS, originally proposed by Governor Schwarzenegger in January 2007), requires the oil industry to reduce the carbon pollution from its products by an average of 1 percent per year for the next 10 years. The LCFS gives fair treatment to all fuels based on their pollution performance – it does not single out any particular fuel or industry. Like all pollution standards, it simply rewards cleaner fuels and penalizes the dirtier fuels.
The LCFS is the only standard in the country that will force the oil industry to provide a suite of cleaner fuels, including electricity, hydrogen and advanced biofuels. Needless to say, victory for old, dirty ethanol on this lawsuit would be a huge victory for Big Oil too. In fact, the oil industry recently launched through a well-known front group (the Consumer Energy Alliance whose members include American Petroleum Institute, BP, ExxonMobil, ConocoPhillips, Shell Oil and others) a national campaign whose sole goal is to defeat LCFS proposals in other states and in Congress.
The old, dirty ethanol industry is dominated by big companies like Archer Daniels Midland (ADM) and Poet. It’s baffling why an industry that benefits from $4 billion a year in government subsidies can’t find a way to compete on environmental merits. Increased production efficiencies, using more of the corn plant, and switching to cleaner fuels in its refineries are all known ways to make current ethanol cleaner. Advanced ethanol, made from waste materials and other more sustainable feedstocks, promise even greater reductions.
California drivers are already spending roughly $375 million a year subsidizing the 950 million gallons of ethanol that is currently blended into our gasoline supply. The LCFS is critical part of the state’s overall strategy to cut global warming pollution, reduce our dangerous dependency on oil, and to unleash clean fuels innovation. Global warming unchecked will worsen our air quality, threatens our coastline with rising sea levels, and diminishes our water supply by shrinking snow packs. To protect our health and our economy, Californians should demand more in return from the old, dirty ethanol industry than lawsuits and excuses for why it can’t compete in a clean energy economy.