About Senate Bill 350
SB 350 (de León) would require a 50% reduction in petroleum, 50% increase in renewables for electricity generation and a 50% increase in the energy efficiency of buildings by 2030. In regard to the 50% gasoline and diesel reduction provisions, SB 350 would grant the Air Resources Board significant authority to adopt regulations that will result in a 50% reduction in petroleum use in cars and trucks by 2030.
While California petroleum fuel providers are committed to helping the state lead the way in reducing greenhouse gas emissions, we believe SB 350’s fuel reduction mandate is an impossibly unrealistic goal.
Fuel use in California
California motorists and businesses are major consumers of fossil fuel products.
- Ninety-two percent of the 26 million passenger vehicles and light duty trucks and 1 million medium and heavy duty trucks currently use petroleum fuels.
- Together, these vehicles use 13 billion gallons of gasoline and 3.3 billion gallons of diesel fuel per year — 35.6 million gallons of gasoline and 7.2 million gallons of diesel every day.
SB 350 makes no provision for what will replace the 50 percent in lost petroleum
Forecasts of future fuel use in the United States are at odds with the Senate Pro Tem’s proposed 2030 reduction targets. The U.S. Energy Information Administration forecasts that even with major advances in biofuels and alternative energy technologies, 80% of the U.S. energy portfolio will be comprised of fossil fuels by 2040.
According to the latest BP Energy Outlook, energy consumed by the U.S. transport sector is expected to decline by 13%in 2035. However, BP forecasts oil will remain the dominant fuel source in the United States, falling from 95%today to 84% by 2035. Biofuels will represent just 9%of total transportation fuels in the U.S.
Average fuel economy for new 2014 vehicles was 25.3 miles per gallon, according to the University of Michigan Transportation Research Institute. A 50 percent reduction in gasoline and diesel use through improved fuel economy would require the average to increase to 50 miles per gallon in 15 years.
According to the California Air Resources Board, there are approximately 100,000 electric vehicles in California on the road today that make up 40 % of the nation’s fleet of electric vehicles. (This number does not include alternative fuel vehicles such as flex-fuel.) . A 50%reduction in petroleum use for transport using electric vehicles would require that number to increase to 13 million electric vehicles by 2030.
SB 350 delegates significant authority to the California Air Resources Board without providing direction to focus on demand side policies or supply side policies.
SB 350 does not provide clear policy direction to the California Air Resources Board on whether to promote demand side policies or to promote and establish heavy handed supply side fuels policies. This significant delegation of authority does not ensure that needed legislative oversight is in place to provide the appropriate guidance to regulators.
Demand Side Policies
Currently there are several statewide policies directed at impacting demand for petroleum transportation fuels. These policies include SB 375 which is designed to drive emission reductions through reductions in regional travel through land use measures intended to reduce operation of light – and medium duty – vehicles.
Supply Side Policies
California currently has several expensive and unsustainable policies attempting to force transportation fuel policy changes on the supply side of the market. For example, the Low Carbon Fuel Standard is a costly and inefficient fuels policy that will likely impact the reliable supply of transportation fuels used by the vast majority of Californians today.
The petroleum industry is driving California’s economy
A mandated 50% reduction in petroleum could have a significant impact on transportation in California, but also on future jobs and valuable tax revenue. The LAEDC’s 2014 analysis of the petroleum industry’s economic contributions to California found sizable economic activity:
- 468,000 direct, indirect and induced jobs
- $220 billion in direct economic activity statewide
- $21.6 billion in state and local tax revenues statewide
- $14.7 billion in sales and excise taxes statewide
- 104,000 jobs in Los Angeles County alone
- Los Angeles County also receives $5 billion in state and local tax revenues