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Chevron Lobbies Against California Low-Carbon Rule

Chevron is leading a lobbying and public relations campaign to weaken California’s low-carbon fuel standard, a law the oil company once supported.

Chevron pledged in 2007, the same year California Gov. Arnold Schwarzenegger signed the low-carbon fuel standard executive order, to develop a gasoline replacement from wood, Bloomberg reports.

A year later Chevron and forest products company Weyerhauser formed a joint venture, Catchlight Energy, to research and develop technology for converting cellulose-based biomass into economical, low-carbon biofuels.

While the joint venture still exists, the companies axed plans to build commercial plants by 2014. The Catchlight plan was doomed when management determined biofuels had to compete with fossil fuel projects for funds, Bloomberg says.

Chevron shelved its biofuel research work by 2010 after determining products that generated potential returns of 5 percent weren’t enough, according to the news agency. Chevron typically earns an average of 17 percent on capital investments, such as oil and gas exploration.

The low-carbon fuel standard (LCFS) mandates a reduction of greenhouse gas emissions from the state’s transportation fuels, such as diesel and gasoline, by at least 10 percent by 2020 compared to 2010 levels. The carbon intensity reductions outlined in the law include tailpipe emissions and all other emissions associated from the production, distribution and use of transport fuels within the state.

The law has been criticized by oil stakeholders since it was enacted. Three years ago, the trucking industry, oil refiners and lobby groups sued to stop implementation of LCFS.

Chevron and Exxon’s recent involvement indicates efforts to undermine the law have escalated. Chevron and Exxon say they’re pushing back against the low-carbon fuel standard because technology necessary to comply with the mandate may not be available for years and will push retail gas prices higher and lead to job losses if it’s not rewritten, reported Bloomberg.

Meanwhile, other major companies have expressed support for the law. Earlier this month, major business interests and nonprofit organizations across the state filed four separate briefs supporting the LCFS in the state Appeals Court in Fresno. Supporters include natural gas supplier Clean Energy, Pacific Gas & Electric, the National Biodiesel Board and the California Biodiesel Alliance.

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