BILL ANALYSIS                                                                                                                                                                                                    






                                                       Bill No:  SB  
          916
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                           Senator Lou Correa, Chair
                           2013-2014 Regular Session
                                 Staff Analysis


          SB 916  Author:  Correa
          As Amended:  March 19, 2014
          Hearing Date:  April 22, 2014
          Consultant:  Paul Donahue


                                     SUBJECT  

           Biosynthetic lubricating oil: State procurement and retail  
                                      sale

                                   DESCRIPTION
           
          Effective January 1, 2016, requires state agencies that  
          procure lubricating oil for state vehicles to purchase  
          biosynthetic lubricating oil that meets specified standards  
          for biodegradability and that has been certified, as  
          specified. 

          Subject to certain conditions, prohibits the sale of  
          lubricating oil in California after January 1, 2017 unless  
          these specific standards are met and certifications  
          obtained. Specifically,  this bill  :

          1)Defines "lubricating oil" as motor oil intended for use  
            in an internal combustion gasoline or diesel engine used  
            in passenger cars, light-duty trucks, or vans.

          2)Expands the definition of "used oil" in existing law to  
            include synthetic oils composed of bio-based feedstock,  
            not just oil or synthetic oil refined from crude oil.

          3)States that "minimal standards for biodegradability"  









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            means that the amount of biobased content<1> within the  
            lubricating oil is not less than 25 percent and that the  
            biobased content is biodegradable.<2>

          4)Provides that, on and after January 1, 2016, every  
            procuring agency<3> in state government that purchases  
            lubricating oil shall only purchase biosynthetic  
            lubricants<4>  that meet the all of the following  
            requirements:

             a)   It is a biosynthetic lubricant and meets or exceeds  
               minimal standards for biodegradability.

             b)   It is, at the time of sale, certified for use by  
               the American Petroleum Institute's Engine Oil  
               Licensing Certification System.

             c)   It is, at the time of sale and based on a  
               life-cycle analysis, certified by a third party  
               sustainable biomaterials certification entity to be  
                both  of the following:

               i)     Produced without causing higher greenhouse gas  
               ----------------------
          <1> "Biobased content" is defined in the bill as the amount  
          of biobased carbon within a biosynthetic lubricant,  
          expressed as a percent of total weight (mass) of the  
          organic carbon within the product, as determined by using  
          the ASTM D6866-12 (standard test methods for determining  
          the biobased content of solid, liquid, and gaseous samples  
          using radiocarbon analysis), as that test method read on  
          January 1, 2013.

          <2> This bill defines "biodegradable" to mean a substance  
          that can demonstrate the removal of at least 70 percent of  
          dissolved organic carbon; produces at least 60 percent  
          theoretical carbon dioxide; consumes at least 60 percent of  
          the theoretical oxygen demand; OR the substance meets other  
          specified requirements.

          <3> "Procuring agency" means any state agency or any person  
          or entity contracting with that agency for the supply of  
          lubricating oil to the state. 

          <4> A "biosynthetic lubricant" is lubricating oil that  
          contains a biobased product. 






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                 or criteria pollutant emissions than comparable  
                 petroleum-based lubricants.

               ii)    Produced without having significant negative  
                 impacts on food security.<5>

          5)Specifies that before July 31, 2015, the Department of  
            General Services (DGS) shall provide language for a state  
            agency to include in a contract or grant that implements  
            the above biosynthetic lubricating oil procurement  
            requirements.

          6)Specifies that, when procuring lubricating oil for  
            gasoline or diesel engines used in passenger cars,  
            light-duty trucks, and vans, a state agency, city,  
            county, district, including a school district and  
            community college district, may purchase lubricating oil  
            that meets the standards and is certified according to  
            the terms of this bill.  

          7)Requires DGS to list on its website the names of  
            lubricating oil products that meet or exceed the  
            standards and certifications of the bill, and transmit a  
            copy of this list to the University of California (UC) to  
            facilitate UC's procurement efforts. 

          8)Prohibits the sale of lubricating oil in the State after  
            January 1, 2017 unless the producer of the lubricating  
            oil files a document with the Department of Resources  
            Recycling and Recovery (CalRecycle), by which the  
            producer verifies that the lubricating oil is in  
            compliance with biodegradability standards and other  
            certifications and requirements outlined above [See  
            Paragraph 4), supra]. 

             a)   Requires CalRecycle to acknowledge receipt of this  
               self-verification by providing the producer with a  
               unique lubricating oil biodegradability compliance  
               number for each product self-verified by the producer.  
             -----------------------
          <5> The bill authorizes a Director of the Department of  
          Resources, Recycling and Recovery (CalRecycle), who has  
          reason to believe that either of the certifications  
          (greenhouse gas/criteria pollutant or food security) is not  
          scientifically conclusive, to require another third party  
          sustainable biomaterials certification entity to re-examine  
          the certification.





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             b)   Specifies that by acknowledging receipt of  
               self-verification of compliance, CalRecycle shall not  
               be deemed to be ensuring the veracity of the  
               information provided by the producer.

             c)   Specifies that a producer of lubricating oil shall  
               verify that the biosynthetic oil meets all applicable  
               standards and requirements each time the lubricating  
               oil is re-certified by the American Petroleum  
               Institute's Engine Oil Licensing Certification System.

          9)Authorizes the Director of CalRecycle, in consultation  
            with an advisory committee created by  this bill  , to grant  
            one-year delays, beginning on July 1, 2015, in both the  
            government procurement and retail sale mandates if the  
            director finds that the biosynthetic lubricating oil is  
            not commercially available.<6>

          10)Provides that a procuring agency or sellers of oil are  
            allowed no longer than the later of 12 months after the  
            retail sale mandate, or after the end of the last of all  
            extensions granted by the director of CalRecycle, to sell  
            stock on hand, and requires that persons subject to these  
            mandates to maintain records for review by CalRecycle to  
            verify that the lubricating oil sold was in the legal  
            possession of the seller before those times.    

          11)Requires CalRecycle to inform local agencies and  
            individuals of the benefits of biosynthetic lubricating  
            oils.

          12)Contains several legislative findings and declarations  
            claiming, among other things, that a significant source  
            of stormwater pollution will be reduced with the use of  
            biosynthetic lubricants; these lubricants will reduce  
            greenhouse gases; and that the benefits to public health  
            and the environment make biosynthetic oil a  
            cost-effective alternative to petroleum-based lubricating  
            oil. 

                                   EXISTING LAW
                           -------------------------
          <6> In deciding whether to grant of deny an extension, the  
          director of CalRecycle shall consider, but not be bound by,  
          the recommendation of the advisory committee. 





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           1)Prohibits the sale of engine oil and lubricating oil  
            unless the product conforms to certain specifications.

          2)Regulates used oil as a hazardous waste, and defines  
            "used oil" to mean oil that has been refined from crude  
            oil, or any synthetic oil, that has been used, and, as a  
            result of use or as a consequence of extended storage, or  
            spillage, has been contaminated with physical or chemical  
            impurities.

          3)Requires state agencies and contractors with state  
            agencies to purchase lubricating oil containing the  
            greatest percentage of recycled oil, unless a specified  
            certification is made.  

          4)Requires local agencies to purchase lubricating oil that  
            contains recycled oil if the product meets specified  
            conditions.

          5)The California Oil Recycling Enhancement Act,  
            administered by CalRecycle, imposes a charge upon the  
            sale of lubricating oil to provide, among other things,  
            grants and contracts to local governments, nonprofit  
            entities, and private entities and recycling incentives  
            to every industrial generator, curbside collection  
            program, and certified used oil collection center for  
            collected or generated used lubricating oil.

          6)Establishes a goal of reducing or displacing the  
            consumption of petroleum products by the State fleet when  
            compared to the 2003 consumption levels.

          7)Requires DGS, in consultation with the California  
            Environmental Protection Agency, members of the public,  
            industry, and public health and environmental  
            organizations, to provide state agencies with information  
            and assistance regarding environmentally preferable  
            purchasing.

                                    BACKGROUND
           
           1)Author's statement  :  According to the author's office,  
            biosynthetic lubricating oils, formulated with a  
            percentage of bio-based, biodegradable content, are newly  
            developed technologies that can reduce the adverse  





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            environmental impacts of motor oil, improve water and air  
            quality, and reduce greenhouse gas emissions, all while  
            improving vehicle performance and fuel economy. The  
            author's office states that these biosynthetic  
            lubricating oils have performance qualities similar or  
            superior to other synthetic lubricants, but with added  
            environmental and public health benefits - the oils are  
            biodegradable, non-toxic and do not bio-accumulate in  
            marine organisms. 

            The author notes that used motor oil is the largest  
            volume of hazardous waste generated in California, with  
            approximately 150 million gallons of motor oil purchased  
            every year generating over 90 million gallons of used  
            oil. The author states that an estimated 14-16 million  
            gallons are illegally dumped, ending up in California's  
            rivers, lakes and streams, degrading our drinking water  
            supplies and adding to storm water and coastal pollution.  
            Furthermore, about 60 million gallons of motor oil are  
            lost in use, either burned in the combustion chamber or  
            dripped onto streets and parking lots, creating a "silent  
            oil spill." Federal reports indicate that used motor oil  
            accounts for more than 40 percent of the total oil  
            pollution of our nation's harbors and waterways. This oil  
            is, by definition, uncollectable. That these materials  
            are problematic to our nation's waterways and the oceans  
            of the world is widely understood.

            Reducing the source of toxic contaminants such as  
            petroleum oils has significant economic and environmental  
            benefits. SB 916 will benefit California's water  
            resources and foster accelerated development of this  
            important, emerging technology.

           2)Biosynthetic lubricants  :  According to the proponents,  
            biosynthetic lubricant manufacturing technology is well  
            established, and is capable of supplying a  
            high-performance, bio-based, biodegradable blend of  
            lubricating oil for use as a base oil<7> in gasoline and  
            diesel engines in passenger cars, light-duty trucks, and  
            vans. Proponents add that a recent life cycle analysis  
          -------------------------
          <7> According to Biosynthetic Technologies, a sponsor of SB  
          916, finished motor oils and lubricants are formulated by  
          blending the base oil and additives to make the final  
          product. 






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            shows this new technology offers an 83% to 88% reduction  
            in greenhouse gas emissions as compared to similar  
            petroleum based synthetic oils. 

            According to industry literature, there are a number of  
            advantages to bio-based crankcase oils. Technically, when  
            compared to mineral oils, bio-based oils have excellent  
            lubricity, low evaporation rates, and high viscosity  
            indices. The primary disadvantage of bio-based oils is  
            that they lack sufficient oxidative stability in their  
            natural form. Chemical additives and antioxidants are  
            being used to address this problem.<8>

            Proponents state that, in the past, arguments against  
            lubricants sourced from biological sources have cited  
            poor engine protection performance, oil degradation and  
            cleanliness with their use. Until recently, these were  
            reasonable concerns, but new proprietary technologies  
            have shown that the motor oils currently being used by  
            automakers could perform equally well - or even much  
            better - when co-blended with as much as 25% biosynthetic  
            oil.

           3)Is there sufficient production capacity  ?  Effective  
            January 1, 2016, SB 916 requires state agencies and state  
            contractors to purchase lubricating oil that meets  
            minimal standards and certifications, and bans the sale  
            of lubricating oil in California after January 1, 2017  
            unless it meets these minimal standards for biosynthetic  
            lubricants. 

            The author's office states that, if SB 916 were fully  
            implemented, approximately 32 million gallons of  
            biosynthetic base oil would be required, but that, per  
            industry estimates, there are approximately 135 million  
            gallons of base oil production capacity currently  
            available, with expansion capacity at over 330 million  
            ------------------------
          <8> Josh Pickle; "The Advantages and Disadvantages of  
          Biodegradable Lubricants," Machinery Lubrication, February,  
          2012. See also, European Renewable Resources & Materials  
          Association, at  
          http://www.errma.com/technologies/bio-based-lubricants/








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            gallons.<9> The author states that, as markets develop,  
            investment will continue to flow to production of these  
            products. Many producers can manufacture bio-based  
            synthetic esters, with little or no modification to  
            existing equipment. All that is required in many  
            instances is to switch to a bio-based feedstock.   

            The author's office states further that procurement  
            officials now have access to environmentally superior,  
            cost-effective technologies such as that developed by the  
            USDA.  Many companies have developed this biosynthetic  
            technology based on the USDA patents. Availability of  
            large quantities of bio-based base oil definitely helps  
            to accelerate prospects for widespread commercialization  
            of biosynthetic lubricants.<10> 

            Opponents dispute the fact that there is sufficient  
            production capacity of biosynthetic oils to meet the  
            mandates set forth in SB 916. They state that bio-based  
            oils are classified in the American Petroleum Institute  
            (API) Group V category, which requires each unique  
            lubricant formulation with bio-based oils to be certified  
            through a comprehensive testing program, which is  
            rigorous, expensive and time-consuming, requiring  
            laboratory and actual engine-use tests, and in some  
            cases, lengthy field tests. Qualifying a single  
            formulation can cost millions of dollars. The opponents  
            state that few if any bio-based, biodegradable lubricants  
            are currently approved for use, and contend that it would  
            likely be impossible to have enough qualified lubricants  
            by the 2016 state procurement deadline, let alone the  
            2017 retail sale mandate deadline.

            The author's office responds by first noting that  
            biosynthetic motor oils are simply synthetic motor oils  
            formulated with a percentage of bio-based and  
            biodegradable content, and that feedstocks used to  
            ------------------------
          <9> According to information supplied by proponents, the  
          largest existing suppliers of biosynthetic base oils  
          currently operating include ExxonMobil (Louisiana), with  
          annual production capacity of 45 million gallons, Elevance  
          (Indonesia), with annual production capacity of 41 million  
          gallons, and BASF (Texas, France, & Germany), with annual  
          production capacity of 25 million gallons.

          <10> See, e.g., Fuels and Lubes International Journal,  
          Quarter Four, pp 22- 28, 2013






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            produce this motor oil are readily available. The author  
            further notes that practically every major oil and  
            chemical company in the world is investing in this  
            technology, including BP, Shell and Exxon.

            Finally, the author states that, based on industry  
            recommendations, SB 916 allows the Director of CalRecycle  
            to grant one-year extensions to the mandates in the bill  
            if biosynthetic motor oils are not commercially  
            available. These safeguards will help ensure sufficient  
            supply and give the market time to adjust. 

           4)API certification, auto manufacturer warranties, and  
            related issues  : As noted above, SB 916 requires state  
            agencies and state contractors to purchase lubricating  
            oil that meets minimal standards for biodegradability,  
            and bans the sale of lubricating oil in California after  
            January 1, 2017 unless it meets these minimal standards  
            for biodegradability.  

            However, the above mandates will not be imposed in  
            California under SB 916 unless the biosynthetic  
            lubricating oils are, at the time of sale, certified for  
            use by the Engine Oil Licensing Certification System  
            (EOLCS) of the American Petroleum Institute (API).<11> 

            The International Lubricants Standardization and Approval  
            Committee (ILSAC), was formed in 1992 by American and  
            Japanese auto manufacturers to represent their interests  
            to the API. Since 1992, there have been five successive  
            ------------------------
          <11> According to the API, the EOLCS is a voluntary  
          licensing and certification program that authorizes engine  
          oil marketers who meet specified requirements to use the  
          API Engine Oil Quality Marks. Launched in 1993, API's  
          Engine Oil Program is a cooperative effort between the oil  
          and additive industries and vehicle and engine  
          manufacturers Ford, General Motors, and Chrysler and those  
          represented by the Japan Automobile Manufacturers  
          Association and the Engine Manufacturers Association. The  
          performance requirements and test methods are established  
          by vehicle and engine manufacturers and technical societies  
          and trade associations. The EOLCS Program is backed by an  
          ongoing monitoring and enforcement program that ensures  
          licensees adhere to program requirements.  
          (http://www.api.org/eolcs)






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            API/ILSAC standards that have become the minimum  
            requirement for oil used in American and Japanese  
            automobiles.<12> This standard is typically amended every  
            3-5 years, and the next ILSAC standard (ILSAC GF-6) is  
            expected to be certified and introduced to the market in  
            January 2017.<13>

            Opponents contend that, given the limitations of API and  
            ILSAC classifications and certifications, it is highly  
            unlikely that any of the biosynthetic engine oils  
            mandated by SB 916 would receive next generation  
            API/ILSAC approval in time for the planned introduction  
            date of these oils in 2017. Therefore, opponents question  
            the appropriateness of the statewide retail mandate for  
            these oils in SB 916 that also begins in January 2017.  
            The opponents add that auto manufacturers are reluctant  
            to grant approvals to new components with which they are  
            unfamiliar unless sufficient data has been developed and  
            real world testing has demonstrated adequate performance,  
            which they contend hasn't been done for bio-based  
            lubricating oils. Opponents suggest that this API/ILSAC  
            certification issue is hugely problematic for state  
            purchasing programs, because it raises concerns about the  
            risk that vehicle manufacturers will void warranties of  
            any vehicles using bio-based motor oil products not  
            licensed by API.

            The author counters, first by reminding opponents that  
            the retail sale mandate does not take effect unless the  
            biosynthetic lubricating oils are, at the time of sale,  
            certified for use by the API. The author also notes that,  
            due to superior performance, many new and  
            high-performance vehicle manufacturers like Mercedes  
            Benz, BMW and Volkswagen require the use of synthetic  
            motor oil in their vehicles, and that biosynthetic motor  
            oils meet or exceed all existing motor oil standards. The  
            ------------------------
          <12> The current standard is ILSAC GF-5. Introduced in  
          October 2010 for 2011 and older vehicles, it is designed to  
          provide improved high temperature deposit protection for  
          pistons and turbochargers, more stringent sludge control,  
          improved fuel economy, enhanced emission control system  
          compatibility, seal compatibility, and protection of  
          engines operating on ethanol-containing fuels up to E85.

          <13> See, e.g., http://www.pceo.com/ilsac_timeline






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            author reiterates that the API and ILSAC standards are  
            the baseline, but states that vehicle manufacturers are  
            prohibited by federal law from including the requirement  
            of the use of a specific brand or trade name of product  
            or service as a condition of a warranty.<14> 

           5)Recycling and rerefining of used oil  :  CalRecycle  
            licenses used oil collection centers, which accept used  
            lubricating oil from the public and are exempt from laws  
            requiring hazardous waste facility permits.<15>  
            CalRecycle also licenses used oil recycling facilities  
            that convert used oil into recycled oil.<16> The recycled  
            oil program administered by CalRecycle promotes advances  
                                                                                  in technologies, including use of rerefined oil in  
            automotive and industrial lubricants.<17>  According to  
            CalRecycle, there are 4 used oil recycling facilities in  
            California, and one used oil rerefining facilities. Used  
            oil is managed as a hazardous waste under California  
            law.<18>  

            In 1991, the US EPA issued guidelines for used oil  
            management standards that classified used oil as a  
            hazardous waste only if it contained specific  
            contaminants, such as chlorine. Federal law and  
            regulations define used oil as "any oil that has been  
            refined from crude oil, or any synthetic oil, that has  
            ------------------------
          <14> This is an apparent reference to the Magnuson-Moss  
          Warranty Act (15 U.S.C.  2301 et seq.), which makes it  
          illegal for companies to void a warranty, or deny coverage  
          under the warranty, simply because an aftermarket or  
          recycled part was used. If an aftermarket product is  
          defective, and causes damage to another part that is  
          covered under the warranty, the manufacturer or dealer has  
          the right to deny coverage for that part and charge for any  
          repairs. (See  
          https://www.consumer.ftc.gov/articles/0138-auto-warranties-r 
          outine-maintenance) 

          <15> Pub. Res. Code  48622.

          <16> Pub. Res. Code  48624.

          <17> Pub.Res. Code  48632.

          <18> Health & Safety Code 25250.4 (a)  






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            been used and as a result of such use is contaminated by  
            physical or chemical impurities." <19>According to the US  
            EPA, the first criterion for identifying used oil is  
            based on the origin of the oil. Used oil must have been  
            refined from crude oil or made from synthetic materials.  
            Animal and vegetable oils are excluded from EPA's  
            definition of used oil. In a used oil guidance document,  
            US EPA states that used oil is not vegetable and animal  
            oil, even when used as a lubricant. <20>

            Relying on these federal documents and regulations,  
            opponents to SB 916 contend that the inclusion of  
            bio-based animal and vegetable oils in lubricating oil,  
            and ultimately, used oil, is a direct violation of  
            federal law and as a result, it jeopardizes the state's  
            increasingly successful used oil management program,  
            particularly since most oil recycling and all oil  
            rerefining is done outside California. Opponents say that  
            there has been no testing to determine whether bio-based  
            oil can be rerefined and whether it is compatible with  
            existing refining technology. Opponents contend that  
            their own internal testing suggests that used material  
            generated from bio-based lubricants cannot be rerefined.  
            Regardless of the results of any testing, opponents state  
            that re-refiners will not violate federal law by  
            accepting used motor oil that is bio-based. 

            The author and proponents counter argue that opponents  
            are ignoring federal regulations that govern mixtures of  
            used oil and products, such as bio-based materials, that  
            are also subject to regulation as used oil. In  
            particular, 40 CFR  279.10(d) provides in part that  
            "mixtures of used oils and fuels or other fuel products  
            are subject to regulation as used oil?" 

            The issue raised is whether or not a "mixture" of used  
            oil containing bio-based materials would be classified as  
            a mixture of used oil and fuel or other fuel products.   
            Proponents argue that it is, and state that a clarifying  
            letter from US EPA should be forthcoming. Moreover,  
            ------------------------
          <19> See 42 U.S.C.  6903; 40 CFR  279.1

          <20> See,  
          http://www.epa.gov/osw/conserve/materials/usedoil/usedoil.ht 
          m






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            proponents say that this is clearly the intent of federal  
            laws, noting that US Department of Agriculture's  
            Bio-Preferred Program recently designated bio-based  
            crankcase oils as a new product category under the  
            federal procurement preference for bio-based products.  

            Opponents state that mixtures of used oil and other  
            products are expressly limited by federal regulation to  
            fuels, i.e., diesel. 

            The author and proponents also note that California  
            regulations define synthetic oil and specify that  
            "vegetable or animal oil used as a lubricant, hydraulic  
            fluid, heat transfer fluid, or for other similar  
            industrial purposes shall be managed as used oil if it is  
            identified as a non-RCRA [California-only] hazardous  
            waste."

           6)Environmental benefits  : The author states that, compared  
            to petroleum based lubricants, biosynthetic lubricants  
            biodegrade much faster, helping to reduce stormwater  
            pollution at the source. In addition to biodegradability,  
            biosynthetic lubricants have substantially lower toxicity  
            and do not bioaccumulate. The author also notes that the  
            Department of Defense has stated that the "control of  
            pollutants from automobile use could be a more direct and  
            cost effective method to reduce the level of contaminants  
            entering water bodies statewide.<21>

          The author also states that, compared to petroleum based  
            lubricants, biosynthetic lubricants biodegrade much  
            faster, helping to reduce stormwater pollution at the  
            source. In addition to biodegradability, biosynthetic  
            lubricants have substantially lower toxicity and do not  


          -------------------------
          <21> Comment letter, C.L. Stathos, Regional Environmental  
          Coordinator, Department of Defense, on Final Draft  
          Industrial General Permit, State Water Resources Control  
          Board, dated March 13, 2014












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            bio-accumulate.<22> 

            A third party life cycle analysis demonstrates  
            biosynthetic motor oils have significantly lower  
            greenhouse gas emissions.<23> These motor oils reduce  
            piston deposits and allow for longer oil drain intervals,  
            providing for cleaner engines and better fuel  
            efficiency<24>.

            The author and proponents state further that product  
            performance data on biosynthetic oils greatly reduced  
            piston deposits, and that these products have oxidative  
            stability, meaning that they will reduce petroleum  
            consumption and prevent pollution. As to  
            biodegradability, proponents state that testing of  
            biosynthetic lubricants indicate that these oils achieved  
            between 68% and 74% biodegradation, as compared to 41% to  
            47% for conventional motor oils. 

            Among other things, opponents argue that the desired  
            outcome of biodegradable lubricants will not be achieved  
            because fully-formulated, additized lubricants will  
            inhibit biodegradation of the base oil fraction and  
            ecotoxicity impacts will remain essentially the same as  
            petroleum-based lubricating oils. Opponents add that the  
            metal and polycyclic aromatic hydrocarbon contaminants  
            associated with used motor oil in storm water discharges  
            do not originate from the base oil, but rather occur as a  
            result of the lubricant being used in its intended  
            application. 
            ------------------------
          <22>United States Environmental Protection Agency, Office  
          of Waste Water Management, "Environmentally Acceptable  
          Lubricants," EPA 800-R-11-002, Washington, DC, November  
          2011,  
          http://nepis.epa.gov/EPA/html/DLwait.htm?url=/Exe/ZyPDF.cgi? 
          Dockey=P100DCJI.PDF 

          <23> Dustin Mulvaney, "Life Cycle Analysis of Greenhouse  
          Gas Emissions from Biosynthetic Base Oil (BBO) compared to  
          Poly-Alpha Olefin (PAO) Base Oil," EcoShift Consulting,  
          February 3, 2013,  
          http://biosynthetic.com/wp-content/uploads/Biosynthetic-Tech 
          nologies-GHG-LCA-Report2.pdf

          <24> "Lubricant Technical Performance," Biosynthetic  
          Technologies,  
          http://biosynthetic.com/lubricant-technical-performance






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           7)State procurement mandate to purchase biosynthetic oil  :  
            Existing law requires state agencies to reduce  
            consumption of petroleum products in their fleet of  
            vehicles, including through the use of synthetic motor  
            oils.<25> The author and proponents state that the use of  
            biosynthetic lubricating oil will advance state policy to  
            reduce the state fleet's petroleum consumption, and will  
            also protect the environment.  The author also notes that  
            the State Petroleum Reduction Plan identifies the use of  
            synthetic motor oil and extending the intervals between  
            oil changes (which is an added benefit of synthetic oils)  
            as a way to reduce the state fleet's consumption of  
            petroleum.

            DGS reports that, in working to meet the statutory goals,  
            the State fleet has reduced its petroleum consumption by  
            13% and is projected to attain the 2020 goal of a 20%  
            overall reduction. Key to the success has been  
            development and implementation of a plan that has  
            improved the State fleet's overall use of alternative  
            fuels, the reduction of unneeded fleet vehicles, and  
            reducing unnecessary vehicle miles traveled. DGS  
            concludes that the State fleet is on a trajectory to  
            "meet or exceed the 20-percent petroleum reduction goal  
            by 2020." <26> 

            In further support of the state procurement mandate for  
            biosynthetic motor oil in state vehicles, proponents cite  
            the US Department of Agriculture's Bio-Preferred Program,  
            noting that the USDA program also requires a minimum 25%  
            bio-content for motor fuels. In addition, bio-based  
            crankcase oils have recently been added to the Program as  
            a new product category under the federal procurement  
            ------------------------
          <25> Public Resources Code  25722.8 requires DGS to  
          implement a plan to improve the overall state fleet's use  
          of alternative fuels, synthetic lubricants, and  
          fuel-efficient vehicles by reducing or displacing the  
          consumption of petroleum products by the state fleet when  
          compared to the 2003 consumption level. The goal is a 20%  
          reduction or displacement by January 1, 2020.

          <26> 2012 Progress Report For Reducing or Displacing the  
          Consumption of Petroleum Products by the State Fleet,  
          available at  
          http://www.dgs.ca.gov/ofam/Resources/PetrolReduc.aspx  





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            preference. The USDA Bio-Preferred Program designates  
            categories of bio-based products that are afforded  
            preference by Federal agencies when making purchasing  
            decisions. 

            Opponents to SB 916 contend that SB 916 would impose  
            significant new costs on state and local governments  
            because bio-based lubricant ingredients can be  
            substantially more costly than current base oil  
            components. They state that SB 916 would force  
            governmental agencies and the public to shoulder the  
            higher production cost without corresponding, measurable  
            reduction in environmental impacts.

           8)Additional arguments in support and opposition  :  
            Supporters believe that SB 916 will offer California  
            companies new opportunities to compete with the fossil  
            fuel industry in motor oil as well as other lubricants  
            and bio-based products not covered by this new standard.  
            Additionally, the benefits of longer intervals between  
            oil changes, the reduced consumption of lubricating oil  
            over the life of a vehicle, and the reduction in  
            greenhouse gas emissions make biosynthetic oils a  
            cost-effective alternative for vehicles in the state  
            fleet and in general use by Californians. 

            Opponents are concerned that SB 916 would establish a  
            troubling precedent by having the Legislature mandate an  
            unproven technology based on speculative benefits and  
            without regard for predictable impacts on the private and  
            public sectors. If added testing bears out the sponsor's  
            claims, opponents suggest that biosynthetic lubricating  
            oil will succeed in the marketplace on its own merits,  
            and it does not need a market share guaranteed in state  
            law. 

           9)Lubricating oil definitions  :  The definition of  
            "lubricating oils" in existing law differs from that  
            which is contained in SB 916. In Section 48618 of the  
            Public Resources Code, "lubricating oil" includes, but is  
            not limited to, "any oil intended for use in an internal  
            combustion engine crankcase, transmission, gearbox, or  
            differential in an automobile, bus, truck, vessel, plane,  
            train, heavy equipment, or other machinery powered by an  
            internal combustion engine." In SB 916, "lubricating oil"  
            means "oil intended for use in an internal combustion  





          SB 916 (Correa) continued                                 
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            gasoline or diesel engine used in passenger cars,  
            light-duty trucks, or vans." To avoid confusion, SB 916  
            should be amended to conform to the more complete  
            definition of "lubricating oils" in Pub. Res. Code   
            48618. Alternatively, SB 916 should be amended to  
            expressly acknowledge that the definition of "lubricating  
            oil" in SB 916 is intended to be narrower than that which  
            exists in existing law.         

                            PRIOR/RELATED LEGISLATION
           
          SB 546 (Lowenthal), Chapter 353, Statutes of 2009. Raised  
          the recycling fee paid by lubricating oil manufacturers  
          from $0.16 to $0.26 per gallon; increased the incentives  
          paid for recycling used oil; increased the testing  
          requirements for used oil transporters and requires a life  
          cycle analysis of used oil.

          AB 236 (Lieu), Chapter 593, Statutes of 2007. Among other  
          things, established the goal of reducing or displacing the  
          consumption of petroleum products by the State fleet when  
          compared to the 2003 consumption levels

          AB 1201 (Pavley), Chapter 317, Statutes of 2001. Added  
          stormwater pollution mitigation and education projects to  
          the activities considered as eligible projects for the  
          various competitive grant programs funded through the  
          California Used Oil Recycling Fund, upon approval of the  
          California Integrated Waste Management Board (CIWMB).

          SB 1979 (O'Connell), Chapter 901, Statutes of 1996. Among  
          other things, mandates a funding level for CIWMB grants and  
          loans for used oil research, testing and demonstration  
          projects designed to develop uses and markets for products  
          resulting from the recycling of used oil. Includes asphalt  
          flux produced from the reprocessing or re-refining of used  
          oil as a recycled material to be used in specified paving  
          materials purchased by the California Department of  
          Transportation. 

          SB 734 (Rosenthal), Chapter 939, Statutes of 1993. Requires  
          state agencies to purchase rerefined products when they are  
          of the same quality and not more than 5 percent more costly  
          than virgin lubricants. 

          AB 712 (Sher) Chapter 675, Statutes of 1993. Extended from  





          SB 916 (Correa) continued                                 
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          70 to 120 the number of days the CIWMB has to report on  
          accumulated industrial and lubricating oil sales and used  
          oil recycling rates. Created a misdemeanor for making a  
          false claim of exemption from payment of used oil recycling  
          fees, punishable by imprisonment for not more than one year  
          and a fine not to exceed $5,000. Made other technical  
          amendments to the Used Oil Recycling Program. 

          AB 2076 (Sher), Chapter 817, Statutes of 1991. Enacted the  
          California Oil Recycling Enhancement Act, creating a Used  
          Oil Recycling Program to promote and develop alternatives  
          to the illegal disposal of used oil. Among other things,  
          requires certified collection centers to accept used oil  
          from the public, without charge, during business hours, and  
          to remit recycling incentives to those who bring oil to the  
          centers. 

           SUPPORT:   

          Biosynthetic Technologies (sponsor)
          Orange County Coastkeeper (sponsor)

          Algae Biomass Organization 
          American Logistics Company
          American Neuro-Psychiatric Network, Inc. 
          American Sustainable Business Council
          Arnel & Affiliates
          ASEA Holdings, LLC
          Athletes First
          Bioamerica
          Beta Analytic, Inc.
          Blue River Advisors
          California Black Health Network
          CleanTECH San Diego
          EcoShift Consulting (Dustin Mulvaney, Principal)
          Elevance Renewable Science, Inc.
          Environmental Defense Fund
          Flexi-Liner Corporation
          G-C Lubricants Company
          Green Earth Technologies
          Insight Accounting
          Insight Wealth Strategies
          Jerry Kohlenberger
          Marine Watch
          Mission Blue
          Modlar, Inc.





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          M-Wave International
          Nettleton Strategies, LLC
          Newport Bay Hospital
          Ohio State University, Bioproduct Innovation Center (Dennis  
          Hall, Director)
          Preferred Hotel Group
          Redwood Innovation Partners
          Sapphire Energy, Inc. 
          Scheweickert and Company
          Searles Company
          Solazyme, Inc.
          Strategic Ocean Solutions
          T2e Energy
          Verdezyne
          Wildcoast
          World Innovation

           OPPOSE:   

          Alliance of Automobile Manufacturers
          American Chemical Council
          Associated Builders and Contractors of California
          Automotive Specialty Products Alliance
          California Chamber of Commerce
          California Construction Trucking Association
          California Council for Environmental and Economic Balance
          California Independent Oil Marketers Association
          California League of Food Processors
          California Manufacturers and Technology Association
          California Metals Coalition
          Center for Food Safety
          Chemical Industry Council of California
          Clean Harbors
          Coalition of Energy Users
          Consumer Specialty Products Association
          Enterprise Holdings (Enterprise Rent a Car)
          Independent Lubricant Manufacturers Association
          Independent Oil Producers Association
          Kern County Taxpayers Association
          Motor and Equipment Manufacturers Association
          National Federation of Independent Business
          Safety-Kleen
          Santa Barbara Technology and Industry Association
          Small Business Action Committee 
          Truck and Engine Manufacturers Association
          Western States Petroleum Association





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           DUAL REFFERRAL  : Senate Environmental Quality Committee

           FISCAL COMMITTEE:   Senate Appropriations Committee 
                                        

                                   **********