The People of America's Oil and Natural Gas Indusry

The Low-Carbon Fuel Folly

Jane Van Ryan

Jane Van Ryan
Posted January 7, 2010

In a move that should raise eyebrows across the country, the Northeast States for Coordinated Air Use Management (NESCAUM) last week agreed to adopt a low-carbon fuel standard (LCFS) to reduce greenhouse gas (GHG) emissions from vehicles and possibly from home heating-oil furnaces. Although on the surface this agreement might sound environmentally friendly, it's likely to do more harm than good.

Today's cars and trucks are designed to make the best use of carbon. In the internal combustion engine, gasoline is mixed with oxygen and subjected to a spark to create the chemical reaction that powers your car. The hydrocarbon molecules in the gasoline split apart releasing energy.

Hydrogen atoms combine with oxygen to form water vapor, and carbon atoms combine with oxygen to create carbon dioxide, both of which are expelled through the tailpipe. Any remaining hydrocarbon molecules go to the catalytic converter where a catalyst converts them into carbon dioxide, which until recently was considered a very benign substance necessary to promote plant growth. If the amount of carbon in the fuel is reduced, the vehicle's efficiency is degraded.

The only way to reduce the GHG impact of a fuel is to reduce the carbon intensity of the fuel's production. The federal government already has established fuel standards that will accomplish significant GHG reductions in fuel production and force the development of new bio-fuel technology that doesn't exist today. Adding a mandate from a group of states might be politically attractive to those states' governors, but it won't speed the development of advanced fuels.

In fact, it's likely that the LCFS could result in the NESCAUM states competing for limited bio-fuel supplies in other states, causing fuels to be shipped needlessly from one part of the country to another. This could put upward pressure on fuel costs and cause more CO2 emissions, not less.

One published report in The Hill says the LCFS is an attempt to reduce the importation of Canadian oil sands because it is slightly more carbon-intensive than some other crude oils. But if the LCFS is successful in reducing Canadian imports, it won't have any impact on emissions because the oil-sands oil will simply be shipped to other customers elsewhere in the world, including China.

Here's the bottom line: The NESCAUM agreement could raise costs to consumers, won't help the environment and could have an adverse impact on trade with our friendly neighbor to the North.

(A footnote: California passed a LCFS a few months ago. For more information about the California initiative, listen to the podcast below and read API's comments on NESCAUM's LCFS plan).