Ethanol-industry representatives were unhappy with the adjustments. "What they've done is given us a glimmer of hope that there'll be balance by 2011. We do not have balance today," said Brooke Coleman, president of the New Fuels Alliance. His group produced a study this year that found gasoline's lifecycle emissions could be up to a third higher than California estimated, when such indirect effects as road building for oil and gas projects and military activities for protecting oil supplies are considered.
One ethanol group did salute the decision, calling it a "victory," with caveats. The Brazilian Sugarcane Industry Association said ARB failed to account for improved fuel manufacturing and harvesting techniques. "Indirect land use changes must accurately represent the dynamics of Brazilian agriculture today," spokesman Joel Velasco said in a statement. "We are confident that a data driven analysis will conclude that indirect land use change from sugarcane cultivation in Brazil is marginal at best."
Environmental groups were uniform in their praise of ARB's action. "It's the future of fuel regulations in this country," said Roland Hwang of the Natural Resources Defense Council. "The handwriting is on the wall."
Also registering their support were the state's major electric utilities – Pacific Gas & Electric Co., Southern California Edison, San Diego Gas & Electric and several major municipally owned utilities.
Oil companies' reactions were mixed, with Chevron supporting the rule and BP criticizing the land-use calculation. The Western States Petroleum Association, meanwhile, warned that consumers would not tolerate uncertainty in fuel prices or availability.
"It's frankly unclear to us how we will comply with this regulation, given what's here today," said Cathy Reheis-Boyd, the association's vice president. "We are not at all convinced that program will deliver $11 billion in savings, but it doesn't matter what we think, it matters what the consumer thinks. When they want fuel, they want it where they want it and they want it to be affordable."
Naomi Kim of the Environmental Justice Advisory Committee, which the state established to review the effects of climate policies on low-income and minority communities, said the rule would violate A.B. 32 by disproportionately affecting the poor by raising food and fuel prices. To that end, she asked the board to remove all food-based fuels, especially corn, from being considered as low-carbon fuels.
Worries about economic impacts
The board member who voted against the rule, cardiologist John Telles, cited the bad economy. Unemployment rates in the San Joaquin Valley have reached 20 percent in some areas, and hospitals are full of patients who cannot pay for treatment, he said.
"I have a hard time believing this is going to be neutral for California," Telles said. "The price of fuel and food may go up, and have an adverse impact on people and environmental justice communities who can afford it the least. Nowhere in this document does it say what we're going to do if that were to occur."
Telles expressed concern that efforts to put a national or regional fuel standard in place would fail. "What will the impact of this be economically, environmentally, socially, if no one tags on behind us?" he asked.
ARB Chairwoman Mary Nichols conceded that the sour economy might derail the rule. "A year ago ... this would have been a very different discussion, because we could just be unabashedly optimistic about the new businesses coming to California, the incentives we could provide," she said. "We could be comfortable we'd be creating a lot of new businesses and jobs here."