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    Gov. Schwarzenegger Weighs-In On Fed'l Energy Bill, Tells Key U.S. Senators He Opposes Fed'l Preemption On LNG, Opposes MTBE Immunity, Opposes New Oil & Gas Leases Off CA Coastline...And Supports Doubling Nat'l Fuel Economy Stds for New Cars, Light Trucks & SUVs

    (May 17, 2005) -- As closed-door Senate negotiations continue over a federal Energy bill with major impacts for LB and California, Governor Arnold Schwarzenegger has sent a letter to two key GOP Senators, backing large parts of previously advanced legislation but opposing controversial provisions -- including federal preemption of state powers in LNG facility siting -- contained in the version of the bill passed by the House of Representatives in April. has obtained a copy of the letter, dated May 13.

    In the letter, addressed to Senators Pete Domenici (R., NM) and Jeff Bingaman (D., NM) (chair and ranking member, respectively, of the Senate Energy and Natural Resources Committee, slated to take up the bill), Governor Schwarzenegger also opposes any new oil and gas leasing of CA's coastline, opposes an exemption freeing MTBE manufacturers from liability for damages caused by their product...and calls for establishing "national fuel economy standards that double the fuel efficiency of new cars, light trucks and SUVs."

    In a section closely watched by LB officials and residents, Governor Schwarzenegger writes as follows regarding proposed federal preemption of state authority over siting LNG plants:

    I oppose federal preemption of State siting jurisdiction of LNG terminals, and urge Congress to preserve a strong role for States in siting both onshore and offshore LNG facilities.

    I urge you to adopt two specific recommendations:

    • Maintain the existing State authority under the Costal Zone Management Act for siting of LNG terminals.
    • Retain the State permit review of siting, construction, expansion, or operation of facilities located onshore or in State waters.

    Regarding offshore oil and gas drilling, the Governor wrote:

    Federal energy policy must not get in the way of California efforts to continue preserving and protecting our State’s environment, one of our great assets. I strongly oppose any new oil and gas leasing off California’s coastline and any efforts to weaken the right of California, or other states, to protect their coastlines from the adverse impacts of offshore oil and gas drilling on the Outer Continental Shelf.

    Thus I urge you to adopt three recommendations:

    • Strengthen the legislative moratorium language.
    • Prohibit any federal funds from being spent on any lease planning activities on the Outer Continental Shelf.
    • Oppose efforts to reduce the states' ability under the federal Coastal Zone Management Act to prevent inappropriate federal development of coastal areas.

    Regarding renewable fuels:

    California has long been a leader in efforts to reduce air pollution. Our aggressive transportation fuel requirements have led to significant reductions in pollutants. To that end, I have consistently called for an end to the federal requirement that oxygen be added to reformulated gasoline. California’s request to waive the oxygenate requirement is still pending before the U.S. Environmental Protection Agency.

    California also recognized the benefits of developing alternative transportation fuels. Cellulosic and grain-based ethanol are renewable sources that reduce our reliance on foreign oil, significantly reduce greenhouse gas emissions and provide economic opportunities for home grown industry. California is eager to produce and use these renewable fuels, but we must have the flexibility to use them in a way that does not adversely affect our air quality.

    I urge Congress to adopt the following recommendations:

    • Remove the oxygenate requirement on reformulated gasoline (RFG).
    • Eliminate any requirement that ethanol be used seasonally, such as with semiannual averaging periods and exempt all RFG areas from summer ozone season ethanol use.
    • Limit the renewable fuels portfolio requirement to 5 billion gallons nationwide until the infrastructure and use of E-85 is widely available.
    • Credit the use of E-85 as a full gallon of ethanol, rather than 0.85 gallons.
    • Provide additional incentives for cellulosic ethanol to account for its superior greenhouse gas emissions relative to gasoline and corn based ethanol. Congress could increase the tax credit for cellulosic ethanol or allow additional credits for cellulosic ethanol relative to corn based ethanol.
    • U.S. EPA should develop new emissions models that use all appropriate data that more accurately reflects current fleet emissions. These models should be updated periodically.
    • Eliminate the exemption that MTBE manufacturers are free from liability for damages caused by their product.

    And regarding fuel efficiency

    Between 1970 and 1985 on-road fuel economy of cars and light-duty trucks in California increased from 12.6 miles per gallon to 20.7 mpg as a result of federal CAFE standards. Unfortunately, fuel economy has actually decreased in recent years. Because CAFE standards have been largely unchanged since 1985, most automotive technological improvements to engines and vehicles have been used to increase performance and overcome gains in weight. To avoid the adverse environmental and economic consequences of our nation’s dependence on foreign petroleum fuels, I strongly urge Congress to take advantage of these existing technologies and to establish national fuel economy standards that double the fuel efficiency of new cars, light trucks and SUVs.

    President Bush has praised the House of Representatives for passing what he called a good bill, publicly citing its LNG sections in several speeches, and urged the Senate to do likewise. However parts of the Senate version of the bill dealing with contentious, big ticket issues (including LNG) are (as of our posting) not yet posted on the Senate Committee's website...and we are told they are under discussion.


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