Tesoro, which operates two refineries in California, has already made modifications [image-nocss] to its facilities to accommodate the new rule, Lynn Westfall, spokesperson for Tesoro, told the newspaper. But the company still filed the lawsuit because, Westfall said, the production of ethanol is believed to increase greenhouse gas emissions.
"The new rule appears to be in conflict with another state law that calls for a decrease in greenhouse gas emissions," Westfall said. "We asked the judge to delay enforcement of the rule until this conflict can be resolved."
Judge Timothy Frawley said he was not persuaded that Tesoro would prevail on the merits of its case at trial or that the company would suffer "irreparable harm" from the new standard. He also said a 1999 environmental evaluation that assessed impacts of using ethanol in amounts up to 10% was sufficient to meet state health code.
"We have decided to drop our lawsuit because in his ruling the judge made clear that he did not accept our central arguments," Mike Marcy, manager of external affairs for Tesoro's California refineries, told the paper. "We feel that the court was wrong in its analysis, but nevertheless we have decided not to pursue the matter any further."
The new standard will replace one established in 1999 and addresses toxic and smog-forming pollutants but not greenhouse gases. CARB separately is developing a low-carbon fuel standard, said the report. Tesoro argued the air board should coordinate the two fuel regulations.
"The CARB rule, which results in the increase of crop-based ethanol in gasoline, violates the intent established by another California regulation, which calls for a decrease in greenhouse gas emissions to 1990 levels by 2020," said Bruce Smith, chairman, president and CEO of San Antonio, Texas-based Tesoro.
Dimitri Stanich, a spokesperson for the air board, said they acknowledge that ethanol produced from corn is problematic, in that studies have shown that its production leads to an increase in greenhouse gas emissions. "The increase [in greenhouse gas emissions] is dependent on the source of the ethanol," he told the paper, "and we are working on ways to address those concerns." Stanich added that he cannot comment directly on the lawsuit filed by Tesoro.
Tesoro is an independent oil refining and marketing company that owns seven refineries in the western United States. Tesoro has a network of 870 branded retail gas stations, more than 380 of which are company owned under the Tesoro, Shell, Mirastar and USA Gasoline brands.
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