US refiners slam 11-state plan for low-carbon fuels

05 January 2010 19:20  [Source: ICIS news]

WASHINGTON (ICIS news)--A top US refining industry leader on Tuesday warned that plans announced by 11 north-eastern states to mandate low-carbon transportation fuels cannot be realised and will cause severe economic disruption in the region.

Charlie Drevna, president of the National Petrochemical & Refiners Association (NPRA), said that a memorandum of understanding (MOU) signed by the governors of 11 northeast states on 30 December is “populist jargon with no economic or technical backing for it”.

“What they propose to do simply cannot happen in terms of economic and social reality,” Drevna said of the 11-state low-carbon fuel plan.

In the memo agreed on 30 December, the governors of Massachusetts, New York, New Jersey, Vermont, New Hampshire, Maine, Connecticut, Rhode Island, Pennsylvania, Delaware and Maryland said they will work this year to complete a programme to reduce the carbon content of transportation fuels consumed in those states beginning in 2011.

The low-carbon fuel standard (LCFS) envisioned by the 11 governors would seek to reduce the carbon intensity of transportation fuels by 10%. The memo does not specify a timeline for that reduction. 

During the year-long effort to develop a specific framework and means of implementing reduced carbon fuel supplies, the governors said they also will consider applying a similar low-carbon mandate for fuel oils consumed in the northeast, chiefly for home heating.

The northeast governors said they were basing their general goals on the low-carbon fuel standard programme initiated by California in 2007.

But Drevna cautioned that the northeast states are seeking to replicate a programme that hasn’t worked in California.

“We look at this and scratch our heads,” Drevna said of the 11-state low-carbon fuel plan. “If they would look at California they’d see it just isn’t working,” he added.

He said that California has not been able to implement its 2007 low-carbon fuel mandate “because it can’t happen if California wants to keep any semblance of economic sanity in their state”.

He cited a 2007 statement by the California Air Resources Board (CARB) that modifications to that state’s refineries could take up to four years to meet the low-carbon fuel standard and could result in higher carbon emissions.

“CARB itself concluded that implementation of the new fuel standard is not technologically feasible,” Drevna said, citing an earlier NPRA comment on the California initiative.

According to the north-eastern states’ memo and supporting documents, the plan would likely establish a credit trading system to encourage fuel suppliers to use increasing volumes of non-carbon biofuels, such as corn ethanol or cellulosic ethanol, to reduce the overall carbon intensity of transportation fuels provided in the north-eastern states.

But Drevna noted that the states’ memo also says that land use changes attributed to biofuels production will be included in determining the carbon intensity of alternative fuels, which could disqualify corn ethanol as a low-carbon energy source.

“Of course cellulosic ethanol will have a much lower carbon footprint than conventional gasoline, but gasoline exists and cellulosic ethanol doesn’t exist in commercial volumes, and it may never reach that level,” Drevna said.

“You can’t legislate technology and you can’t legislate chemistry,” Drevna said. “These political scientists should take a look at real science before they start making policy.”

He also noted that the north-eastern states backing the low-carbon fuel standard have also mandated a reduction in the sulphur content of home heating fuel oil.

“To get low-sulphur heating oil you have to run it through hydrogen treaters, which increases the carbon footprint of the heating oil,” Drevna said.

“These guys don’t have a clue,” he said, referring to the governors. “As a consequence, their constituents are going to have a much more difficult time as we try to swim out of this recession.”

The 11-state low carbon memo also said that the governors plan to offer various stakeholders the opportunity to provide input on the plan.

Drevna said the refining industry would participate in that stakeholder input process, “but I wish they would do the research first, before they set policy”.

To discuss issues facing the chemical industry go to ICIS connect
Paul Hodges studies key influencers shaping the chemical industry in
Chemicals and the Economy

By: Joe Kamalick
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index