States Seek LCFS Ruling Review

STREATOR, Ill. (DTN) -- Nebraska, along with 20 other states, filed a brief in the United States Supreme Court late Monday requesting review of a lower court decision in the challenge to California's Low Carbon Fuel Standard, according to a news release from Nebraska Attorney General Jon Bruning.

"This unconstitutional regulation directly threatens $1.3 billion in ethanol sales from Nebraska alone, and untold billions across the Midwest," Bruning said in the release. "We will continue to fight for Nebraska corn and ethanol producers."

Other states joining in the brief are Alabama, Alaska, Arizona, Georgia, Illinois, Indiana, Iowa, Kansas, Michigan, Missouri, Montana, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wyoming.

The LCFS is a regulation designed to reduce the carbon intensity of fuels sold in California 10% by 2020, one of the measures adopted by the California Air Resources Board to reduce greenhouse gases in the state.

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CARB oversees all air pollution control efforts in California to attain and maintain health based air quality standards.

"It is designed to help clean the air, protect the environment, and drive the development of clean, low-carbon fuels to improve California's energy security and energy independence," CARB said in its regulations.

In 2011, the Eastern District of California found the LCFS violated the dormant commerce clause of the U.S. Constitution by discriminating against out-of-state ethanol.

California appealed the district court's decision to the U.S. Ninth Circuit of Appeals. In March 2012, Nebraska filed a support brief for the plaintiffs in that challenge. In September 2013, the district ruling was reversed at the U.S. Ninth Circuit Court of Appeals by a split-panel decision.

"The implications of the Ninth Circuit's decision are not limited to ethanol- or crude oil-producing states," the brief filed with the Supreme Court states.

"The logic of the decision permits states to penalize or altogether prohibit importation of products produced out of state based on the condemnation of the production method or the distance the product must travel to reach the marketplace. Such a regulatory regime would inevitably lead to trade wars among the states, which destroys the principle underpinning the dormant commerce clause."

Bruning said California's LCFS mandates annual reductions in the "carbon intensity" for gasoline and other transportation fuels sold in California. The regulation assigns higher carbon intensity scores to corn ethanol produced in Nebraska and other Midwestern states compared to identical ethanol produced in California, he added.

(BM/CZ)

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