While both the California and European Union programs establish a trading system for carbon allowances, many traditional fuel suppliers say they cannot meet the mandated reduction targets. The E.U., which is finalizing its rule, has called for a 6 percent carbon cut by the end of the decade.
Tupper Hull, a spokesman for the Western States Petroleum Association, said California’s standards would be “incredibly costly and disruptive to a stable and secure supply of transportation fuels.” His members, which include major oil companies as well as independent producers, did not initially oppose the rule but have “become increasingly concerned about whether the program they were designing was feasible.”
Both programs would make it more difficult for Canada to sell heavy crude extracted from its “oil sands” region, because extracting that oil produces 15 percent more greenhouse gases than regular crude.
Canada has lobbied both Canadian and E.U. officials repeatedly over the past few years to minimize the extent to which its petroleum is penalized for being energy-intensive. Canada’s counsel general in California testified before the state’s Air Resources Board last month.