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California Implements Amendments to Reformulated Gasoline Regulations; Ethanol Blends Up to 10%, Lower Sulfur Cap

California’s Office of Administrative Law (OAL) recently approved the Air Resource Board ’s 2007 amendments to the Phase 3 California Reformulated Gasoline Regulations. (Earlier post.)

The regulation, which is now in effect in California, among other things enables blending of up to 10% ethanol from the current 5.7% level in gasoline—with the requirement that all emissions reduction requirements are met at the desired level of oxygenate blending—and lowers the sulfur cap from 30 parts per million by weight (ppmw) to 20 ppmw (21 ppmw for California reformulated gasoline blendstock for oxygenate blending [CARBOB]) to improve enforceability and facilitate new motor vehicle emissions control technology.

ARB staff had originally submitted the regulation and accompanying documents to OAL in April. OAL disapproved the proposed regulatory action based on several failures in procedure. ARB addressed the concerns and re-submitted.

The new regulation includes changes to the predictive model, a tool used by oil refining companies to formulate lower-emitting gasoline in California. (California’s predictive model is analogous to the EPA’s “Complex Model” for reformulated gasoline.) Refinements to the predictive model include the greater use of ethanol.

In response to the new regulations, Tesoro Corporation’s operating subsidiary, Tesoro Refining & Marketing Co., filed a lawsuit against the ARB to prevent the implementation of the new regulation. In addition, the company is seeking a temporary injunction to stop enforcement of the rule while the lawsuit is being heard.

Tesoro charges that the use of more crop-derived ethanol will increase greenhouse gases associated with fuels at the same time that California is mandating reductions, and that more needs to be done to better understand the impact of crop-based ethanol use on food prices across the country.

Tesoro’s refinery in Martinez is the second-largest refinery in Northern California. It also operates a refinery in Los Angeles. Tesoro recently invested more than $600 million at the Martinez refinery to reduce 3,000 tons of criteria pollutants each year. At its Los Angeles refinery, the company recently invested more than $125 million on new equipment that has reduced particulate emissions. The Company’s California retail system, including the Tesoro, USA Gasoline, Mirastar and Shell brands, consists of 429 branded retail stations.

In total, Tesoro operates seven refineries in the western United States with a combined capacity of approximately 660,000 barrels per day.



P Schager

It's a frivolous lawsuit and a stalling tactic. If Tesoro wants to buy its ethanol from vendors who are so inefficient, backward, and as a practical matter grudgingly investing in their plants, that they put out even more greenhouse gases than petroleum, that's Tesoro's responsibility. It is not because of the ethanol. There are more than enough practical opportunities to make the ethanol in an operation lower in CO2 than petroleum.

Incidentally, as soon as lawmakers break down and start the CO2 tax regime, CO2 emissions from ethanol-making will quickly be curtailed under market pressure. Readers of these pages will know how. Ethanol would get fairly close to net neutral. Theoretically better than neutral because you could sequester fermentation byproduct CO2. Whereas there is little you can do to improve petroleum gasoline. Over the time scale of the California laws in question, the argument that there is a problem is not even close.

The arguments about food prices, etc., are straight political arguments. They have no place in court in this matter. This is about gasoline.

What they would do is cheat the California consumer. Because as soon as farmers have caught up with the demand surge and ended the price blip, ethanol will be clearly cheaper that what petroleum can easily now go up to as we've recently seen. Thus, given the opportunity to put 4% more ethanol in the fuel they will have to take it. Losing refinery business. That's what this is all about.

What's most important is that market openness to enough renewable fuel competition, today meaning ethanol, is key to capping the price of oil and curtailing the risk of California's boys being sucked into oil wars. California loses twice its proportionate share, by the way. California real estate has also been hit hard by all the money being pumped out of the American economy under the oil-dependence maintenance program Tesoro is suing to bolster.

Tesoro's stockholders should ask why the company isn't looking at alternative fuels as an opportunity, as compared with their business where they do all the work and the Arabs make all the money.


I just wish that smaller states would start using pre-existing types/formulations of fuel instead of inventing their own standards. With the situation as it is now, the refineries end up having to produce 18 different formulations of gasoline due to state mandates. It is bad enough that our refining capacity has been stagnant for so long, it is worse that it is located, in large part, right in the middle of hurricane alley, but it is insulting that we can't come up with fewer formulations of fuel to simplify an increasingly complex supply issue. I thought there were 20+ formulations of gasoline in the US, but the only link I could find said 18. Seems like 3 or 4 would be sufficient.
Hopefully by 2010 increasing numbers of EREV's and BEV's will make the gasoline production increasingly irrelevant, one can hope...


Henry Gibson

The state of California and also the US government are violating the US constitution by allowing California officials to even consider what kind of fuels can be used in California. The Constitution says in effect that no State may tax or control a product made in any other state that someone of the other state wishes to import into and sell in California.

Another recent but even more clearly unsupportable action is California's refusal to buy additional electricity generated out of state with coal. To support this action California ought to stop using hydro power imported into California from the Columbia and Colorado rivers into which California supplies almost no drainage. This power can be used in states, such as Nevada, Oregon, Washington, Idaho, Utah, Arizona, Utah, Colorado and New Mexico to supplant the present use of coal for generation in those states. California can get its replacement power from wind and solar at ten dollars a kilowatt hour if necessary.

Remove the subsidies and mandates for fuel ethanol and that industry will mostly dissappear and bioethanol will be imported from Brazil, the cheapest place, similar to toys from China.

There is not enough cropland and forest in the whole US to supply biofuels for the automobiles. Methanol from coal, natural gas and landfill biomass and the methanol's conversion into gasoline with known processes is the route to fuel independance.

Replacing coal power plants with nuclear and other minor sources will reduce CO2 release the quickest way. High temperature reactors will allow the more efficient production of liquid fuels with nuclear energy. All present fuels were produced by nuclear energy from the sun.

The State of California should use its massive financial surpluses to build state owned and state run oil refineries and produce the fuels it deems most politically correct at the price it deems proper. Ex King Canute of England will hold the Pacific back while they do it in reprisal of his role on the Atlantic or North Sea.

California with similar logic could ban oil from its own wells in favor of the crude oil that releases few green house gases(read CO2) during production and refining. ..HG..


When the ethanol mandate came in, Senator Diane Feinstein tried to get a waiver, claiming that modern gasoline formulations could be just as clean without ethanol. Considering the political implications with farmers and such, the waiver was denied. Now the ethanol is transported by rail and the railroads do not have enough tanker cars. It seems like someone benefits and loses from just about everything.

Ike Solem

"The Constitution says in effect that no State may tax or control a product made in any other state that someone of the other state wishes to import into and sell in California."

Yes, and NAFTA says in effect that no Country may tax or control a product made in any other country that someone of the other country wishes to import into and sell in California. It's undemocratic, and yet those are the rules - so the rules should be tossed out.

Keep in mind that the Constitution also allowed for slavery, and you're not going to advocate for that, are you? In fact, the Constitution survived because of its flexibility - and it specifically gave states and individuals the right to protect themselves from harm.

There are clear examples where states have invoked their rights over interstate commerce in this regard - for example, in the shipment and storage of nuclear waste.

Thus, California has the democratic right to control shipments of toxic materials across its borders. Coal-sourced pollution respects no borders, after all - that applies to Chinese and Canadian emissions as well. This means that California can pass laws banning the import of tar sands oil and coal-sourced electricity, as well as laws that restrict energy imports to biofuels and solar- and wind-sourced electricity.

That's what the public wants, and this is a democracy...isn't it?

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