BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 757| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 SB 757 Page 2 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 SB 757 Page 3 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, SB 757 Page 4 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 SB 757 Page 5 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 **** END ****