Looks like the proposal might work, and it might work because the tactic chosen is one that works with the markets, recognizing they are part of a community also wanting a clean environment to live in.
Oil companies await details on fuel rules
Governor's greenhouse gas proposal expected to be market-based.
By Judy Lin - Bee Capitol Bureau
Published 12:00 am PST Tuesday, January 16, 2007
When California demanded better fuel economy in vehicles, automakers protested all the way to court.
But when Gov. Arnold Schwarzenegger decided to target fuel, oil refiners and gasoline sellers responded in a positive way that surprised some observers.
"It's been interesting to watch their reaction," said Ralph Cavanagh, energy program director for the Natural Resources Defense Council. "It's been constructive compared to what people had expected."
Chevron, ConocoPhillips and industry representatives are expressing support for the governor's plan to cut by at least 10 percent all the greenhouse gases released by the state's transportation vehicles over the next 13 years.
In coming weeks, administration officials say the governor will issue an executive order laying out a framework for meeting that goal by promoting alternative and cleaner-burning fuels.
Administration officials and environmental leaders say Schwarzenegger's proposed low-carbon fuel standard isn't expected to meet as much opposition as other environmental mandates because it allows market-based solutions.
Petroleum firms can formulate cleaner-burning gasoline or develop alternative fuels. And they can be exempted from state emission standards if they purchase "carbon credits" from other companies that are exceeding the compliance standards.
In fact, Cavanagh said oil companies will have an edge in competition.
"It might be the case where they're able to work on the solution," he said.
The proposed executive order is being modeled after successful federal regulation to reduce acid rain. In the early 1990s, regulators got coal-burning plants to reduce sulfur dioxide emissions by granting them flexibility, whether installing smokestack scrubbers to remove pollutants or trading pollution credits to meet reduction goals.
