BILL ANALYSIS
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THIRD READING
Bill No: SB 757
Author: Kehoe (D)
Amended: 5/27/05
Vote: 21
SEN. ENERGY, UTIL. & COMMUNICATIONS COMM. : 7-3, 4/5/05
AYES: Escutia, Alarcon, Bowen, Dunn, Kehoe, Murray,
Simitian
NOES: Battin, Campbell, Cox
NO VOTE RECORDED: Morrow
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 6-3, 4/25/05
AYES: Lowenthal, Chesbro, Escutia, Figueroa, Kuehl,
Simitian
NOES: Runner, Campbell, Cox
SENATE APPROPRIATIONS COMMITTEE : 8-5, 5/26/05
AYES: Migden, Alarcon, Alquist, Escutia, Florez, Murray,
Ortiz, Romero
NOES: Aanestad, Ashburn, Battin, Dutton, Poochigian
SUBJECT : Oil Conservation, Efficiency, and Alternative
Fuels Act
SOURCE : Author
DIGEST : This bill enacts the Oil Conservation,
Efficiency and Alternative Fuels Act.
ANALYSIS : Existing law requires the State Energy
CONTINUED
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Resources Conservation and Development Commission
(California Energy Commission or CEC) to implement and
administer various generation and conservation programs.
Additionally, CEC is responsible for monitoring
transportation fuel supplies and prices in the state. The
CEC is required, under current law, to develop biennially
an integrated energy policy report that looks at issues of
supply, demand, and supply reliability for transportation
fuel.
This bill enacts the Oil Conservation, Efficiency, and
Alternative Fuels Act and does all of the following:
1.Makes legislative findings and declarations.
2.Sets a policy that state agencies shall take every
cost-effective and technologically feasible action to
reduce the growth of petroleum demand and increase
vehicle energy efficiency and the use of alternative
fuels. The bill provides that state agencies shall take
the state's transportation energy goals into account in
adopting rules and regulations. The bill provides a
definition for "technologically feasible".
3.Requires the Air Resources Board (ARB), in adopting rules
and regulations to reduce air pollution and toxic air
contaminants from motor vehicle fuels, to consider
requirements, incentives, and partnerships for public and
private fleet operators to purchase and install
alternative fuel vehicles and advanced transportation
technologies, as specified.
4.Requires the California Environmental Protection Agency
(CalEPA), in consultation with ARB, the Department of
Toxic Substances Control, the State Water Resources
Control Board, and air quality management districts, to
develop and consider adoption of model rules, best
practices guidelines, and pollution prevention strategies
to ensure that petroleum refining, storage, and waste
management and disposal sources install best available
technology and pollution prevention measures reflecting
the best practices available to provide the maximum
feasible and cost-effective reduction in air pollution,
water pollution, and toxic waste generation, while
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protecting the public and community health, and worker
health and safety over a 10-uear phased period not to
extend beyond January 1, 2017.
5.Authorizes the CEC to expand the scope of its oil
industry price and supply reporting, monitoring, and
analysis to include trends in world oil demand growth,
including known and proven oil reserves. The CEC must
refer cases to the Attorney General when there may be
market abuse or unfair competition.
6.Requires the Secretary of the Business, Transportation
and Housing Agency to submit recommendations to the
Governor and Legislature by March 31, 2007, regarding
alternative revenue sources to supplement or replace
gasoline and diesel fuel taxes that may be used to fund
state transportation infrastructure investments, taking
into consideration certain factors.
7.Requires CalEPA, with assistance of the ARB, CEC, and the
South Coast Air Quality Management district, to adopt
recommendations, policies, and programs by January 1,
2007, and every third year thereafter, to reduce the rate
of growth in petroleum consumption and increase
transportation energy efficiency, and the use of
alternative fuels, as specified.
8.Requires CalEPA to take action to influence Congress and
the U.S. Department of Transportation to double the
combined fuel economy of cars and light trucks by 2020.
That action must include, but not be limited to,
performing analyses and participating in forums that the
secretary deems useful. Costs associated with this
provision will be minimal.
Comments
Purpose of Bill . According to the sponsor, "California
faces a future of increasing petroleum dependence, supply
disruptions, and transportation fuel price volatility. As
a consequence, the state has become a significant importer
of oil from foreign countries often plagued with military
and political instability. If this import trend continues,
the state's economy, oil supply and price fluctuations,
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will be vulnerable to external disruptions and geopolitical
instability, making the reduction of petroleum consumption
a matter of energy dependence."
This bill addresses improvement of oil refinery safety and
pollution prevention, alternatives to petroleum based
transportation fuels, and monitoring global petroleum
adequacy. The author's office believes that petroleum
reduction in the state strengthens national security,
supports energy independence, creates jobs and business
opportunities, reduces air, water, and soil pollution,
while improving public health and worker safety, and
increases economic competitiveness of alternative fuels and
energy resources.
Current Recommendations . AB 2076 (Shelley), Chapter 936,
Statutes of 2000, required the CEC and the ARB to develop
and adopt recommendations for the Governor and the
Legislature by January 31, 2002, on a California Strategy
to Reduce Petroleum Dependence. The CEC report, "Reducing
California's Petroleum Dependence" dated August 2002,
recommended that the state adopt a policy to reduce
gasoline and diesel fuel demand to 15 percent below 2003
demand levels by 2020 and to maintain that level after that
date. The report included certain recommendations (e.g.,
more fuel efficient tires, improving vehicle maintenance,
doubling light duty vehicle fuel efficiency, implementing
fuel cell-powered vehicles). The report also recommended a
goal of increasing use of non-petroleum fuels to 20 percent
of on-road fuel consumption by 2020 and 30 percent by 2030.
NOTE: For extensive background information, please refer
to the Senate Energy, Utilities and Communications
Committee analysis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/31/05)
American Lung Association of California
California Communities Against Toxics
California League of Conservation Voters
California Natural Gas Vehicle Coalition
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California Thoracic Society
Clean Power Campaign
Heal the Bay
Natural Resources Defense Council
Planning and Conservation League
Sacramento Metropolitan Air Quality Management District
Sierra Club
Union of Concerned Scientists
OPPOSITION : (Verified 5/31/05)
Alliance of Automobile Manufacturers
California Business Alliance
California Business Roundtable
California Chamber of Commerce
California Citrus Mutual
California Council for Environmental and Economic Balance
California Farm Bureau Federation
California Grocers Association
California Hispanic Chamber of Commerce
California Independent Oil Marketers Association
California Independent Petroleum Association
California League of Food Processors
California Manufacturers and Technology Association
California Mining Association
California Motor Car Dealers
California Retailers Association
California Taxpayers' Association
California Taxpayer Protection Committee
California Women in Agriculture
Howard Jarvis Taxpayers Association
Olive Growers Council of California
Small Business Action Committee
Western Growers Association
Western Plant Health Association
Western States Petroleum Association
NC:cm 5/31/05 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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