OPINION: Brown drops an easy climate win in California

By Mike Lewis, Pearson Fuels | September 27, 2018

On Sept. 21, California Gov. Jerry Brown vetoed AB 558, a California bill authored by Assemblymember Sharon Quirk-Silva that was designed to better leverage California’s fleet of flex-fuel vehicles (FFVs). The measure would have required the California Air Resources Board to recommend non-fiscal policies to maximize the use of E85, a fuel blend of 85 percent ethanol and 15 percent gasoline in the 1.5 million FFVs that operate in the state.  The governor’s veto message referenced his recent executive order requiring carbon neutrality by 2045 and stated that, “In order to meet this ambitious goal and truly decarbonize California’s transportation sector, our state agencies must focus on emerging markets for the cleanest vehicles and fuels possible.”

The company that I cofounded, Pearson Fuels, is the state’s largest supplier of E85 and supported the passage of AB 558 because we know that California’s FFVs are underutilized.  Our network of over 150 E85 stations is rapidly expanding to supply skyrocketing demand that is occurring even without a state E85 policy. With the increasing value of California’s Low Carbon Fuel Standard credits plus the value of Renewable Fuel Standard RINs, E85 typically sells at a substantial discount to gasoline on a cost per mile basis. California drivers who own FFVs capable of seamlessly switching back and forth between gasoline and E85 are increasingly seeking out E85 with demand tripling in the state over the last five years. The bill’s modest objective, requiring that CARB to develop and consider adopting E85 policy recommendations that did not involve financial incentives or subsidies for E85 or FFVs, would have enabled California to better leverage this GHG-reducing fleet.  For this reason, AB 558 received support from a wide array of groups and garnered no opposition during its legislative process, and received unanimous approval votes in both the Assembly and Senate. 

Timing is crucial to political decision-making and AB 558’s modest goal was apparently overshadowed by the star-studded Global Climate Action Summit, the signing of the carbon neutral executive order and SB 100, and Governor Brown’s decision to launch a California climate satellite. Unfortunately, the veto inadvertently makes the achievement of California’s ambitious climate goals more difficult and expensive. In the transportation sector, California’s GHG emissions have been increasing since 2013, not decreasing as in the rest of the economy.  Transportation is the toughest sector to decarbonize due to the daunting challenges of fueling a massive fleet in an enormous state rapidly with energy-dense fuel. While state funding for liquid and gaseous renewable fuels has been virtually eliminated by the administration, ethanol, renewable diesel, biodiesel, and renewable natural gas remain the state’s proven GHG workhorses that have enabled California to reduce over 35 million metric tons of GHG emissions in the transportation sector compared to business as usual.

With the veto, the governor opted to forego immediate opportunities to reduce state greenhouse gas (GHG) emissions and to save Californians money at the pump.  As California pursues the mandate of SB 32 to reduce GHG emissions 40 percent below 1990 levels by 2030, it is essential that the state harness the full power of these low carbon fuel workhorses.  At 100 percent utilization, California’s existing fleet of 1.5 million FFVs would utilize about 1 billion gallons of E85 per year, thereby reducing petroleum use by over 700 million gallons.  If California’s existing FFV fleet used E85 75 percent of the time, the state would reduce approximately one million metric ton (1 MMT) of GHG emissions annually compared to gasoline.  

Pearson Fuels is dedicated to continuing to build its E85 network, and to advocating for policies that harness the GHG-reducing value of California’s FFV fleet, and California’s full portfolio of low carbon fuels.  Since FFV models are priced the same as dedicated gasoline models, E85 provides a cost discount, and gasoline remains a fueling option, this GHG reducing strategy is feasible throughout California, including in disadvantaged communities. 

 

This op-ed was provided exclusively to Ethanol Producer Magazine by Mike Lewis, cofounder of Pearson Fuels.

Author’s Contact Information:
Mike Lewis,
Co-Founder
Pearson Fuels
1360 Rosencrants St., Suite A
San Diego, CA 92106
619-806-8593