The Impact of Greenhouse Gas Regulations on the Domestic Oil and Gas Exploration and Production Industry
This article explores the impacts that regulations and goals encompassed in AB 32 and the California Air Resources Board's Scoping Plan could have on the continued exploration and production of domestic oil.
"Due to the higher levels of emissions associated with production and refining of California heavy crude oil, the California Independent Petroleum Association has expressed its concern that the LCFS [A Low Carbon Fuel Standard for California] could create “a serious financial disincentive for California refiners to continue purchasing in state produced heavy oil resources.” Since roughly 64 percent of California’s oil production is heavy oil, a disincentive such as the LCFS might cause a decrease in the use of California heavy crude and lead to a “substantial increase in California’s reliance on tankered imports of crude oil.” As mentioned above, this would not only waste California’s significant reserves of oil, but it would also make California more dependent on foreign and Alaskan oil."
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Energy Committees Newsletter, August 2009
American Bar Association