Bill Text

Bill Information

Add To My Favorites | print page

AB-638 Fuel resources: State Energy Resources Conservation and Development Commission and State Air Resources Board.(2011-2012)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
AB638:v97#DOCUMENT

Amended  IN  Assembly  April 13, 2011
Amended  IN  Assembly  March 09, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 638


Introduced  by  Assembly Member Skinner

February 16, 2011


An act to amend Section 25720 of the Public Resources add Section 43867.5 to the Health and Safety Code, relating to fuel resources.


LEGISLATIVE COUNSEL'S DIGEST


AB 638, as amended, Skinner. Fuel resources: State Energy Resources Conservation and Development Commission. Commission and State Air Resources Board.
Existing law requires the State Energy Resources Conservation and Development Commission (Energy Commission) to examine the feasibility of operating a strategic fuel reserve and recommend an appropriate level of reserves. Existing law also requires the Energy Commission (commission) and the State Air Resources Board (board), in consultation with other state and local agencies the commission deems necessary, to develop and adopt recommendations for the Governor and Legislature on a California Strategy to Reduce Petroleum Dependence. Existing law also requires the commission, in partnership with the board, to develop and adopt a state plan to increase the use of alternative transportation fuels.
This bill would require the commission and the board to, among other things, adopt policies and regulations to attain the fuel consumption targets set forth in the strategy as efficiently as possible state plan to increase the use of alternative transportation fuels, coordinate the attainment of the targets with provisions regulating alternative fuels, and require all assess how future guidelines, regulations and guidelines to maximize, and investments affect the attainment of the fuel consumption targets. The bill would also require the commission and the board, on or before January 1, 2013, in consultation with other state and local agencies the commission deems and the board deem necessary, to adopt a series of interim actions to reduce petroleum fuel consumption by 15% below the 2003 levels by 2020 and increase alternative fuel consumption to 26% by 2022. update a specified economic analysis, develop a strategy for petroleum fuel use reduction and alternative fuel use in specified vehicles, and identify regulatory and statutory barriers to attaining the petroleum fuel consumption targets. The bill would require the commission and the board, commencing January 1, 2014, and triennially thereafter until January 1, 2024, to report to the Legislature on progress in reaching the fuel consumption targets.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 43867.5 is added to the Health and Safety Code, to read:

43867.5.
 (a) The Legislature finds and declares all of the following:
(1) The State of California overwhelmingly relies on a single source of fuel, petroleum, for its transportation needs, and nearly half of that petroleum comes from overseas. This over-reliance on petroleum leaves Californians vulnerable to supply interruptions and price instabilities, and it leaves consumers with essentially no options for alternative transportation fuels.
(2) Californians spend over 20 billion dollars each year on petroleum fuel imports, representing a significant missed economic opportunity.
(3) A 2003 joint report by the State Energy Resources Conservation and Development Commission and the state board, titled “Reducing California’s Petroleum Dependence,” was adopted pursuant in Section 25720 of the Public Resources Code and outlined a statewide strategy to reduce California’s on-road consumption of petroleum-based fuels. The strategy aims to reduce demand by at least 15 percent below the 2003 level by 2020 and to maintain that demand level, less than 15 billion gasoline gallon equivalents per year, for the foreseeable future. The report includes a recommendation that the Legislature codify this target as a statewide goal.
(4) According to the State Board of Equalization, California’s nonaviation sector consumed 18.7 billion gasoline gallon equivalents in 2003 and 16.6 billion gasoline gallon equivalents in 2010; this represents a 13 percent reduction below the 2003 level.
(5) The “State Alternative Fuels Plan,” which was adopted by the state board and the State Energy Resources Conservation and Development Commission pursuant to Section 43866 of the Health and Safety Code, outlined specific strategies that would increase the use of alternative and nonpetroleum fuels. The strategy set a target of 26 percent penetration for alternative fuel use in on-road and off-road vehicles by 2022, projected to be approximately 5.3 billion gasoline gallon equivalents displaced that year.
(6) In 2007, alternative fuels accounted for less than 5 percent of the transportation sector’s consumption.
(7) Therefore, it is in the interest of the state to codify petroleum reduction and alternative fuels usage goals that will help guide California down a path to transportation energy security, improve environmental quality, reduce fuel price volatility, and demonstrate California’s continued leadership in reducing greenhouse gas emissions.
(b) The state board and the State Energy Resources Conservation and Development Commission shall do all of the following:
(1) Coordinate efforts to implement this article and Section 25720 of the Public Resources Code. The state board and the State Energy Resources Conservation and Development Commission may consider synergies between new or existing programs, projects, investments, or regulations that may accelerate attainment or maintenance of the targets.
(2) Adopt polices and regulations to attain the following targets:
(A) By 2020, reduce onroad petroleum fuel use by at least 15 percent below the 2003 level, and maintain that level into the foreseeable future.
(B) By 2022, increase the use of alternative transportation fuels to at least 26 percent of total onroad and offroad vehicle fuel use in the state.
(3) Assess how future guidelines, regulations, and investments, where appropriate, affect the petroleum reduction and alternative fuel usage targets in paragraph (2).
(c) On or before January 1, 2013, the state board and the State Energy Resources Conservation and Development Commission, in consultation with other state and local agencies, as the state board or the commission may deem necessary, shall do all of the following:
(1) Update the economic analysis used in developing and reviewing state regulations to include a range of petroleum fuel prices to more accurately assess the future cost of petroleum-based fuels.
(2) Develop a specific strategy and target for petroleum fuel use reduction in light, medium, heavy-duty, and off-road vehicles.
(3) Identify regulatory and statutory barriers to reaching the petroleum reduction and alternative fuel use targets in paragraph (2) of subdivision (b). The state board and State Energy Resources Conservation and Development Commission shall take any necessary regulatory steps to overcome those barriers on which the state board and the commission have the authority to act.
(d) On or before January 1, 2014, and triennially thereafter, the state board and the State Energy Resources Conservation and Development Commission shall submit a report to the Legislature on progress in reaching the targets in paragraph (2) of subdivision (b). The report shall include, at a minimum, all of the following:
(1) Details as to the quantities of petroleum and alternative fuels used in the state during the preceding year in absolute terms and as a percent of the state’s overall fuel mix.
(2) An analysis of the effects on the state economy of increasing alternative fuel usage and reducing petroleum usage. The analysis shall include costs to the state economy if petroleum prices remain at current levels, or rise to higher levels.
(3) Identification of any new regulatory or statutory barriers to reaching the targets in paragraph (2) of subdivision (b).
(4) An assessment of the effect of proposed regulations or guidelines on petroleum reduction and alternative fuel use in the state.
(e) (1) Notwithstanding Section 10231.5 of the Government Code, the requirement for submitting a report pursuant to subdivision (d) shall become inoperative on January 1, 2024.
(2) A report to be submitted pursuant to subdivision (d) shall be submitted in compliance with Section 9795 of the Government Code.
(3) A report required pursuant to subdivision (d) may be developed and submitted in conjunction with any other report or study that the state board or the State Energy Resources Conservation and Development Commission submits to the Legislature, as the state board and the commission may determine to be appropriate.

SECTION 1.Section 25720 of the Public Resources Code is amended to read:
25720.

(a)By January 31, 2002, the commission shall examine the feasibility, including possible costs and benefits to consumers and impacts on fuel prices for the general public, of operating a strategic fuel reserve to insulate California consumers and businesses from substantial short-term price increases arising from refinery outages and other similar supply interruptions. In evaluating the potential operation of a strategic fuel reserve, the commission shall consult with other state agencies, including, but not limited to, the State Air Resources Board.

(b)The commission shall examine and recommend an appropriate level of reserve, but in no event may the reserve be less than the amount of refined fuel that the commission estimates could be produced by the largest California refiner over a two week period. In making this examination and recommendation, the commission shall take into account all of the following:

(1)Inventories of California-quality fuels or fuel components reasonably available to the California market.

(2)Current and historic levels of inventory of fuels.

(3)The availability and cost of storage of fuels.

(4)The potential for future supply interruptions, price spikes, and the costs thereof to California consumers and businesses.

(c)The commission shall evaluate a mechanism to release fuel from the reserve that permits a customer to contract at any time for the delivery of fuel from the reserve in exchange for an equal amount of fuel that meets California specifications and is produced from a source outside of California that the customer agrees to deliver back to the reserve within a time period to be established by the commission, but not longer than six weeks.

(d)The commission shall evaluate reserve storage space from existing facilities.

(e)The commission shall evaluate a reserve operated by an independent operator that specializes in purchasing and storing fuel, and is selected through competitive bidding.

(f)(1)Not later than January 31, 2002, the commission and the State Air Resources Board, in consultation with other state and local agencies that the commission deems necessary, shall develop and adopt recommendations for the Governor and Legislature on a California Strategy to Reduce Petroleum Dependence.

(2)The strategy shall include a base case forecast by the commission of gasoline, diesel, and petroleum consumption in years 2010 and 2020 based on current best estimates of economic and population growth, petroleum base fuel supply and availability, vehicle efficiency, and utilization of alternative fuels and advanced transportation technologies.

(3)The strategy shall include recommended statewide goals for reductions in the rate of growth of gasoline and diesel fuel consumption and increased transportation energy efficiency and utilization of nonpetroleum based fuels and advanced transportation technologies, including alternative fueled vehicles, hybrid vehicles, and high fuel efficiency vehicles.

(4)The commission and the State Air Resources Board shall do all of the following:

(A)Attain the targets set forth in the strategy as efficiently as possible.

(B)Coordinate the attainment of the targets with Article 6.5 (commencing with Section 43865) of Chapter 4 of Part 5 of Division 26 of the Health and Safety Code.

(C)Modify existing programs to maximize the attainment of the targets.

(D)Require all future regulations and guidelines to maximize the attainment of the targets.

(E) On or before July 1, 2012, report to the relevant legislative policy committees on the progress in implementing this section.

(i)The requirement for submitting a report imposed under this subparagraph is inoperative on July 1, 2016, pursuant to Section 10231.5 of the Government Code.

(ii)A report to be submitted pursuant to this subparagraph shall be submitted in compliance with Section 9795 of the Government Code.

(5)On or before January 1, 2013, the commission and the board, in consultation with other state and local agencies the commission deems necessary, shall adopt a series of interim actions to reduce petroleum fuel consumption by 15 percent below the 2003 level by 2020 and increase alternative fuel consumption to 26 percent by 2022, consistent with this subdivision and Section 43866 of the Health and Safety Code.

(g)The studies required by this section shall be conducted in conjunction with any other studies required by acts enacted during the 2000 portion of the 1999–2000 Regular Session dealing with gasoline prices.