Nebraska Corn Board lauds judgment striking down California’s low carbon fuel standard

LINCOLN, NEB. — The Nebraska Corn Board celebrated the end of 2011 with a victory when Judge Lawrence J. O’Neill struck down California’s low carbon fuel standard. Judge O’Neill found the standard unconstitutional by means of violating the Commerce Clause of the US Constitution.

“This is a great victory for Nebraska’s ethanol and corn industries and Nebraska’s economy as a whole,” said Tim Scheer, farmer director from St. Paul and vice chairman of the Nebraska Corn Board. “This judgment will mean that the largest fuel market in the US will continue to be open to the benefits of corn ethanol produced right here in Nebraska and the Midwest.”

The low carbon fuel standard that had been in effect since April of last year had the goal of reducing green house gas emissions from transportation fuels by 10 percent by 2020. While this was as admirable goal, it had many flaws including penalizing Midwest produced corn ethanol in favor of California ethanol. “This is what the Judge ultimately struck down in his ruling,” said Kelly Brunkhorst, director of research for the Nebraska Corn Board.

The judgment also prohibits the enforcement of the low carbon fuel standard while the litigation or possible appeal is ongoing.

With twenty-five plants operating and producing nearly 2 billion gallons of ethanol in Nebraska, California’s 15 billion gallon transportation fuel market was an important destination for Nebraska. “If we would have been shut out of that key market, it would have been devastating to Nebraska and other mid-western states,” added Brunkhorst.

The original lawsuit challenging California’s low carbon fuel standard was filed in the Eastern District Court of California by the Renewable Fuels Association, Growth Energy, Rocky Mountain Farmers Union, Redwood County Minnesota Corn and Soybean Growers, and Penny Newman Grain against the California Air Resources Board in December of 2009. The suit was filed on the basis of conflicting with Federal law, interfering with interstate commerce and discriminating against out-of-state ethanol producers and importers.

The Nebraska Corn Board thanks the Nebraska Attorney General’s office and five other state attorney generals for filing an Amicus Brief in support of the lawsuit. “The filing of the brief, along with the collaboration from five other corn ethanol producing states, showed great support in the discrimination we saw in the standard,” concluded Scheer.

The Nebraska Corn Board is a self-help program, funded and managed by Nebraska corn farmers. Producers invest in the program at a rate of 1/4 of a cent per bushel of corn sold. Nebraska corn checkoff funds are invested in programs of market development, research and education.

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