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Why should California matter to non-Californians?
California is the most populous state in the US, has the largest economy in the US and, if it were a country, it would be the fifth-largest economy in the world. California has the most electoral votes (55) and the largest number of members in the US House of Representatives (53). This contributes to California’s role in shaping federal policy and California has historically been seen as a leader on environmental concerns. California is in the process of updating its climate policies, which have the potential to influence carbon capture policy at the Federal level and beyond.
California’s Influence on Carbon Capture Policy
In 2006, Governor Arnold Schwarzenegger signed the Global Warming Solutions Act, or AB 32, into California State Law. AB 32 was an ambitious bill for the time, intended to address global warming by establishing a program to reduce greenhouse gas (GHG) emissions from all sources throughout the state to 1990 levels by 2020. With the passage of AB 32, California became one of the first states in the US to move forward with a regulatory plan to address climate change. This report explores AB 32’s impact on evolving carbon capture policy and provides information on action steps in response.
CARB and the Scoping Plan
The California Air Resources Board (CARB) falls under the umbrella of the California Environmental Protection Agency. CARB came about as a merger of the Bureau of Air Sanitation and the California Motor Vehicle Pollution Control Board in 1967, a result of efforts to address the critical problem of air pollution in the state under Governor Ronald Reagan. With AB 32, CARB became responsible for monitoring and reducing GHG emissions that cause climate change. AB 32 required CARB to develop a Scoping Plan that explained the methods California would use to accomplish the goal of reducing emissions to 1990 levels by 2020. CARB approved the first The Scoping Plan in 2008 with updates required for at least every five years. Since 2008, there have been two updates to the Scoping Plan, in 2014 and 2017. Each Scoping Plan has included a set of policies to help California reach its GHG targets. CARB designed a range of programs intended to monitor and reduce GHG emissions, including the Low Carbon Fuel Standard (LCFS).
LCFS
The LCFS is a program intended to incentivize the use of low-carbon transportation fuels based on the fuel’s lifecycle GHG emissions per unit of energy—or carbon intensity (CI) as rated by CARB. The regulation initially laid out annually declining CI benchmarks for the average transportation fuel mix from 2011 through 2020. In September 2018, CARB adopted regulatory amendments to extend the LCFS for an additional ten years with a 20% CI target reduction from 2010 levels by 2030. Included in the 2018 amendments was the Carbon Capture and Sequestration Protocol under the Low Carbon Fuel Standard formally recognizing carbon capture as an acceptable strategy to reduce emissions from transportation fuels. This created further incentive (in addition to the 45Q tax credit) for the ethanol industry to utilize CCS in ethanol production. Not only does the LCFS recognize CCS as a viable way to reduce emissions, but it also allows for the captured CO2 to be used in Enhanced Oil Recovery (EOR), otherwise known as CCUS (Carbon Capture Utilization and Sequestration).
Ethanol
Ethanol is the largest by volume of California’s “renewable” fuels. In 2020, California’s ethanol consumption in the transportation sector was 28,988 Thousand barrels, second only to Texas at 30,974 Thousand barrels. For contrast, Florida’s ethanol consumption in 2020 was 19,164 thousand barrels. As we have discussed in a previous report, a recent peer-reviewed study found that as a result of the Renewable Fuel Standard (RFS) mandate (the federal policy that incentivizes ethanol production), corn cultivation increased by 8.7% and expanded to 6.9 million additional acres of land between 2008 and 2016. The RFS has contributed to changes in tilling and the increased application of nitrogen-based fertilizers. This enormous escalation in nitrogen fertilizer use has increased nitrous oxide (N2O) emissions and sacrificed water quality. Ultimately, the study concluded that ethanol is at least 24% more carbon-intensive than gasoline.
Other concerns about ethanol as a “renewable” fuel include that the ethanol in California is chiefly imported from Midwest states. Ethanol fuel cannot be transported via pipeline, so it is transported by truck or rail and cannot be blended with gasoline until the end-market locations. Moreover, certain percentages (10 and 15) of ethanol in gasoline can increase evaporative emissions and permeation, resulting in increased air quality concerns. When ethanol is exposed to warmer temperatures, it evaporates faster and releases organic compounds that contribute to the formation of ground-level ozone. This is the reason that the EPA, until recently, had banned the summer sale of E-15 gasoline (gas blended with 15% ethanol).
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