California seeks ethanol support for fuel standard

By Steve Gorman and Nichola Groom

LOS ANGELES (Reuters) - California regulators preparing Thursday to adopt landmark rules curbing carbon emissions from transport fuels made an eleventh-hour bid to woo critics who call the measures unfair to corn-based ethanol.

Transport alone accounts for 40 percent of greenhouse gas emissions in California, which ranks as the leading automobile market in the United States.

If adopted by the Air Resources Board as expected, the low-carbon fuel standard would become the first measure in the nation to impose on motor fuels limits on the amount of greenhouse gases, which contribute to global warming.

Similar rules are being considered in 11 other states that are waiting for California to act. President Barack Obama has also called for a nationwide low-carbon fuel standard to help meet his goal of cutting greenhouse gas emissions more than 80 percent by mid-century.

Ethanol industry advocates and scientists are among those who have vehemently opposed rules drafted last month by the state's Air Resources Board, saying they put grain-based biofuels at a competitive disadvantage.

In a move to quiet those concerns, the state's top air quality regulator, Mary Nichols, sent a letter Wednesday to biofuels industry executives insisting that "corn ethanol will play an important role in helping California achieve the goals" of the proposed regulations.

"What we're trying to convey is that we are open, that we are listening and that we are determined to adapt the rule on a real-time basis as we get new and better science," Nichols said in a telephone interview.

One copy of the letter, released to Reuters, was addressed to former General Wesley Clark, co-chair of the biofuels association Growth Energy and a former Democratic U.S. presidential candidate.

FURTHER STUDY PROMISED

Nichols said she believed many ethanol industry objections stemmed from misunderstanding the proposed regulation. She said she also spoke by telephone to Clark, who has been spearheading an intense campaign against the proposed fuels standard and planned to testify at Thursday's hearing.

"I think the number of points that he's going to make, and the concerns, are going to be reduced substantially," she said.

A Growth Energy spokesman, Roger Salazar, said the group was pleased by Nichols' overture, but he did not know how it would play at the hearing.

Salazar cited as particularly important a pledge by Nichols to further study controversial provisions of the rule on indirect carbon impacts from all transport fuels.

"The results of this investigation and recommended changes to the rule will be presented to the board on or before December 2011," she wrote.

California's plan takes a sweeping "cradle-to-grave" approach to cut the carbon footprint of fuels. It also seeks to spur development of cleaner-burning alternatives to gasoline and diesel to help abate climate change and cut oil imports.