Comment Log Display

From: Charles Davidson, Sunflower Alliance and the Rodeo Citizens
Association. Hercules, CA
To: California Air Resources Board (CARB)
Date: February 20, 2024
Re: Concerns Regarding LCFS Eligibility and Claims by the Rodeo
Phillips 66 and Martinez Marathon Refineries

Dear Chair Liane Randolph, CARB Members, and Hon. Dr. Steven
Cliff,

I write to express urgent concerns about claims made by the
Phillips 66 San Francisco Refinery in Rodeo and the Martinez
Marathon Refining Company regarding their renewable diesel
projects' eligibility under CARB's Low Carbon Fuel Standard (LCFS).
Their claims misrepresent the eligibility criteria and carbon
greenhouse gas footprint requirements of renewable diesel, but also
exploit regulatory loopholes, potentially violating CARB
regulations. Specifically, these LCFS violations regard both the
use of virgin food oil non-waste feedstock for renewable diesel and
the fact that renewable diesel refining is profoundly energy
intensive. 

Existing lax GHG auditing by CARB, allows the refineries to misuse
generous State and Federal low-carbon subsidies for projects that
are financially dependent on using unearned LCFS certifications.
For LCFS-accredited CO2 greenhouse gas reduction projects for
renewable diesel, there is an urgent need for rigorous guardrails
and pre- and post-project per barrel GHG auditing.

KEY ISSUES:
1.   Misallocation of LCFS Exemptions: Both refineries are
inappropriately claiming LCFS tailpipe GHG exemption allowances for
renewable diesel from virgin food oils, traditionally reserved for
waste-based feedstocks. Tailpipe CO2 emissions from fuel combustion
represents 75% of total lifecycle GHGs, whether from renewable
diesel or petroleum diesel. Removing tailpipe GHG emissions from
LCFS GHG accounting for virgin food oil feedstock, promotes a
massive, unjust food-to-fuels conversion pipeline. According to
CARB's own documents, tailpipe CO2 exemption allowances should only
be reserved for rendered waste fats, oils and greases (ie, FOGs),
not virgin food oils, because: 
 
The CO2 emitted from vehicles during [used cooking oil] biofuel
combustion is considered carbon neutral...as the carbon released
was uptaken from the atmosphere within a short timeframe by the
plant that produced the oil. [A. Low Carbon Fuel Standards (LCFS).
p.19. CARB. 
https://ww2.arb.ca.gov/sites/default/files/2020-09/basics-notes.pdf]
 
2.   Lack of Carbon Intensity Reduction Evidence: There is no
substantial evidence to demonstrate a reduction in carbon intensity
per barrel of renewable diesel produced (compared to the
pre-project petroleum baseline). Instead, both project's
Environmental Impact Reports (EIRs) clearly demonstrate a large
(post-project) increase in per barrel hydrogen production and the
resultant large increase in per barrel GHG emissions. (1)
 
3.  Inadequate CARB Oversight: The refineries' claims have been
locally approved without sufficient scrutiny, despite public
comment on these matters. The mere fact of CARB not auditing these
GHG-related discrepancies in LCFS qualification scoring, highlights
critical oversights in CARB's lifecycle GHG assessment capabilities
for renewable diesel projects dependent on substantial
GHG-reduction subsidies. 
 
IMPLICATIONS:
The Phillips 66 Rodeo Renewed Project and Marathon's Martinez
Renewable Fuels Project, being among the largest hydrogen-based
renewable diesel initiatives globally, involve significant
financial and reputational stakes. Yet, both refineries'
environmental claims stand on shaky ground, with potential
loopholes allowing continued use of high-emission
petroleum-refining processes.
 
What has been lost amongst the public promotion of renewable diesel
and the Rodeo Renewed Project, is that Phillips 66's Environmental
Impact Report maintains a little-known backdoor loophole that will
allow the refinery to continue to use their high GHG-emitting,
massive bottom-of-the-barrel petroleum-refining Delayed Coker
complex. 
 
RECOMMENDATIONS:
Reevaluate LCFS Eligibility: CARB must closely examine and rectify
the misapplication of LCFS exemptions for high-GHG virgin food
oil-sourced renewable diesel, that is extremely expensive, requires
subsidies and always has critical supply constraints that make its
unrestricted use for transportation fuel a potential national
security issue
 
Implement Rigorous GHG Accounting: It's imperative to introduce
stringent, project-specific GHG accounting, hydrogen accounting and
auditing measures to ensure the veracity of claimed environmental
benefits and prevent greenwashing.
 
Promote Transparency and Sustainability: By addressing these
issues, CARB can reinforce its commitment to environmental
stewardship and truly sustainable energy solutions.
I trust CARB will take these concerns seriously, ensuring that LCFS
certifications and subsidies genuinely contribute to reducing GHG
emissions and advancing sustainable practices.

Sincerely,

Charles Davidson

PS: FOOTNOTES
1) INCREASE IN REFINERY-LEVEL CO2 GHG EMISSIONS PER BARREL: 
% Increase, estimated based on EIR-provided information, relative
increase from petroleum baseline, ie, refinery-wide, yearly Mt CO2,
divided by yearly product amount. (Mt CO2; million tons of CO2e
GHGs).  
 
Phillips 66: ~54-76% (relative increase from baseline) -- (2.147 /
2.171 Mt CO2 = 0.99) ÷ [(67/105 bpd = 0.64)-to-(67/120K(capacity)
bpd = 0.56) = ~ (1.54-to-1.76)/1.00 
Marathon: ~77% (relative increase from baseline) -- (2.169 / 1.145
MtCO2= 0.53) ÷ (48K / 160K(capacity) bpd = 0.3) = 0.53 / 0.3 = ~
1.77/1.00  
 
 
LIMITATION OF RENDERED WASTE FEEDSTOCK SUPPLY: By 2030, the
combined renewable diesel feedstock needs of Phillips 66 and
Marathon, alone, will be 97.3 % of CARB's projected amount of total
California waste oil (FOG) feedstock available, until 2045 (neither
including, nor considering, CARB's ambitious SAF aviation target
goals).  
 
CONSEQUENCES OF THE ABOVE LIMITATIONS: If the renewable diesel from
only the Phillips 66 and Marathon were combined, ~ 43% of ALL US
soybeans would go to renewable diesel (or fungible edible
food-quality alternatives, IF there were no waste FOGs used in
their manufacture). This would equal an area planted entirely with
soybeans, row-by-row, the size of the State of Michigan planted
border-to-border. "To produce 100 percent of 2022 US diesel fuel
consumption in the transportation sector would require more than
160 million metric tons (MMT) of feedstock, which is 10 times US
production of vegetable oils in 2022 or 80 percent of global
vegetable oil production in 2022" Everything You Wanted to Know
About Biodiesel and Renewable Diesel. (Jan. 10, 2024) The Union of
Concerned Scientists. 
https://blog.ucsusa.org/jeremy-martin/all-about-biodiesel-and-renewable-diesel/]
 
SUPPLY INSTABILITY EXACERBATING THE ABOVE LIMITATIONS: Foreign
sources of soybeans have profoundly decreased since the war in the
Ukraine began and most recently, because the collapse of soybean
production in Argentina (a major global soybean producer) due to
drought. Specifically, noting that "in the 2022/23 season,
Argentina had a historical crop failure caused by hot, dry
conditions enhanced by a third consecutive La Niņa. The USDA
estimated Argentina's 2022/23 production at 25 million metric tons,
the smallest since 1999/00, with a 43% drop from the previous year.
Local sources such as the Buenos Aires Grains Exchange went even
lower, putting last year's production at 21 million metric tons."
Beginning over one year before the invasion of Ukraine and since,
the rate of inflation for global virgin food oils has increase at a
faster rate than all other major food items. 
 
In stating their reasons for limiting renewable diesel production
the Union of Concerned scientists state the following need "to be
realistic about where they come from, and limit feedstocks to
sustainable resources used at a reasonable scale to avoid turning a
helpful tool into a harmful dead end. The realistic potential for
biofuel conversions is quite small because of the limited
availability of suitable feedstocks. Exaggerated hype about
potential for refinery conversions to biofuel production amounts to
greenwashing that distracts from more scalable solutions."
[Everything You Wanted to Know About Biodiesel and Renewable
Diesel. Also, see: The overlooked hub of South American: New Trase
data on Argentina's soy supply chain highlights how indirect soy
supply in South America could be hiding deforestation in global
supply chains. Soy. (Aug. 11. 2022)
https://trase.earth/insights/argentina-the-overlooked-hub-of-south-american-soy]
 
 
SUMMARY: Virgin food oil supply is becoming increasingly limited
for various geopolitical, climate change, market structure and
other reasons. The first step towards limiting the misuse of
valuable virgin food resources is limiting their being misused for
LCFS accreditation and government subsidies. The method to achieve
LCFS truthfulness would be a loophole-free auditing of lifecycle
CO2 GHGs for renewable diesel, on a per barrel basis with the full
accounting of hydrogen production metrics and tailpipe emissions. 

CC: ATTACHMENT [SAME AS ABOVE TEXT]