Premium ContentMouse over Home then click on Premium Content for information.Local ethanol producers say their industry has scored an important victory with a federal judge's decision to throw out a tighter fuel standard in California.
The state's Low Carbon Fuel Standard program, introduced in 2007, was aimed at cutting down on pollution from fuel burned on the road — an overall 10 percent reduction of greenhouse gas emissions by 2020.
But the road map to that goal, which included complex rules about where and how fuel is produced, took fire from ethanol producers across the Midwest.
In 2009, several groups, including the Renewable Fuels Association and ethanol trade group Growth Energy, filed a lawsuit to block the plan. The attorneys general in Nebraska, Kansas, Missouri, Michigan and the Dakotas filed a brief in support of the suit, noting that 31 percent of the ethanol exported from Nebraska goes to California.
They said California's plan would unfairly shut Midwest-made ethanol out of California's more than 1 billion-gallons-per-year ethanol market in favor of ethanol from California or foreign countries — and hurt a growing industry.
More than two years later, a U.S. District Court judge in Fresno, Calif., agreed.
In a ruling issued just before the end of the year, Judge Lawrence J. O'Neill said the California standard was unconstitutional because it blocked the free flow of commerce between states. He granted an injunction requested by the industry groups, making the standard unenforceable.
Todd Becker, president and CEO of Omaha-based Green Plains Renewable Energy — the country's fourth-largest ethanol producer — said the decision was a significant one.
"I think it's a big victory for the Midwest, a big victory for corn-based ethanol, and I'm sure the fight's not over," Becker said.
The California Air Resources Board has already filed notice that it will appeal the decision.
But Nebraska ethanol advocates say they're pleased.
Kelly Brunkhorst, director of research for the Nebraska Corn Board, said his group had been watching the case closely and believed California's rules were based on false assumptions.
To meet the new standards, the state was interested in more than just the greenhouse gases burned after ethanol ended up in the gas tank of a car. Regulatory officials wanted to know about the carbon output of the facility that produced the ethanol and for the vehicles that would transport it to California.
There also were questions about where and how the corn was grown — and if growing it for ethanol meant land somewhere else would be cleared to grow corn for other purposes.
All of that, Brunkhorst said, put out-of-state ethanol at a disadvantage.
"Ultimately if Midwest ethanol would have been continuing to be shut out of that market, ethanol that would have normally flowed west to California would have flowed east to compete with other states."
Todd Sneller, administrator of the Nebraska Ethanol Board, said many local producers had been trying to figure out how to split up their production processes so that at least some of their ethanol would be suitable for California.
"It was promoting a lot of inefficiency that they will not now have to deal with," he said.
Contact the writer:
402-444-1543, erin.golden@owh.com
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