By considering a low-carbon fuel initiative, California has managed to anger ethanol producers and petroleum companies in one fell swoop. The California Air Resources Board is debating the implementation of new fuel standards that would require the state to reduce the carbon content of its fuels by 10 percent. The deadline for accomplishing this feat would be 2020.
Oil producers are upset at the proposed rules because they do not believe that there will be enough cleaner hydrogen and natural gas fuels available by 2020, or enough vehicles that use these fuels. Ethanol producers, meanwhile, are upset because the rules evaluate the total carbon cost of their product, not just the emissions produced when it is burned. Making ethanol from corn has a major environmental impact due to the amount of land that has to be cleared and the amount of energy that has to be expended to refine and transport the ethanol.
Plus, the proposed regulations also take into account the global effects of shifting cultivation to corn from other crops. For example, in Brazil, farmers have started to cut down rainforest to grow soybeans because farmers in the US are growing fewer soybeans and more corn.
In an article on Forbes.com, Tom Koehler, a policy adviser at Pacific Ethanol, denies that corn-based ethanol is to blame for deforestation:
"It’s a total shell game. There’s no way you can prove that growing corn in Iowa has anything to do with destroying the Amazon forest in Brazil," said . "You cannot connect the dots with a straight face."
Low carbon initiatives are good for the planet but horrible for CA business. By making it more expensive to operate, these measures will strangle companies operating in one the most difficult business environments in the US. Why would you have an office in CA when you could have one in Pheonix where costs are so much lower? To learn more about the effect of these environmental initiatives check out http://www.caivp.org