BILL NUMBER: AB 638 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 13, 2011
AMENDED IN ASSEMBLY MARCH 9, 2011
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.
State-mandated 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.