California’s factory dairy farms are major sources of methane, which has 86 times the global warming potential of CO2 on a 20-year timescale. But instead of being regulated to reduce their global warming impact, they’re richly rewarded as prime beneficiaries of California’s transition from fossil fuels to zero-emission electric vehicles — even though they actually contribute virtually nothing to the eventual goal: just 1% of total diesel equivalent fuel volume in 2045, compared to 7% in 2024, according to projections by the California Air Resources Board [CARB].
This is part of a larger imbalance in California’s Low Carbon Fuel Standard [LCFS], established under Governor Arnold Schwarzenegger in 2009, as described to Random Lengths by NRDC’s Kiki Velez. “For EVs and EV infrastructure it’s about $17 billion from the program over its lifetime since 2011, and biofuels have gotten about $22, $23 billion dollars,” she said.
Ending that imbalance is a major focus of activists as CARB is engaged in updating the program this year. On August 28, CARB’s Environmental Justice Advisory Committee adopted a set of proposals to do just that in a multipronged Comprehensive EJ Scenario. It’s also supported by traditional environmental advocacy groups like the Sierra Club, NRDC, California Environmental Voters, etc. It’s vital not just for California, but for the world, as other countries as well as states, have begun to look to California’s LCSF as a model for their own transportation transition policies.
The LCSF treats dairy farm methane as a dramatic reducer of the carbon intensity of fuels (with an average carbon intensity of -344 — compared to 0 for solar energy), via the use of methane digesters at factory farms. In turn, this is also used to produce “dirty hydrogen” that’s far more heavily subsidized than clean (aka “green”) hydrogen produced by electrolysis. The LCFS also incentivizes biofuels from crop-based feedstocks, which can have devastating consequences — such as contributing to deforestation, even of rain forests. These are just three of several ways the LCFS pours money into environmentally questionable practices rather than the electric vehicles and supporting infrastructure that represent California’s zero-emissions transportation future.
At CARB’s September 28 public hearing on the LCFS, staff reiterated its support for extending the “avoided methane credit” another 17 years, but it also agreed to examine a favorable analysis of the Comprehensive EJ Scenario, which would eliminate the credit effective January 1, 2024, as well as capping biofuel feedstocks.
The EJ Scenario was found to be “reasonable and consistent with CARB priorities,” resulting in “faster and greater support for CARB EV policies” in a study by Dr. Michael Wara and colleagues at Stanford’s Climate and Energy Policy Program. The scenario would also reduce local impacts and avoid unintended impacts.
Those local impacts can be devastating.
“In my town, water is not drinkable, because of this problem. Our asthma rates have increased,” said Armand Ruiz of Los Banos in public comments.
“I invite the people of this commission, those who give credits to the dairies, to come and live in my community for one week to smell it, to live with all the flies, and to breathe this polluted air so that you can understand, so you can understand what we’re explaining to you.”
Maria Arlo lives in Pixely, where there are 27 dairies, 15 of which have their wastes processed in one digester. “They also work overnight, day and night to make the methane gas,” Arlo said. “The emissions are killing people and they’re dying with lung problems. We ask you to please look for a remedy and establish a remedy because all these incentives are causing the expansion of dairies.”
Ran Ress of The Center on Race Poverty and the Environment, an EJ organization based in the San Joaquin Valley, put those experiences into a policy perspective.
“Large dairies are predominantly located near low-income communities of color, which must bear the externalities of increased odor flies water pollution, water scarcity, and air pollution,” Rass said. “At the same time, the LCFS as proposed will drive substantial increases in gas prices…. It will average a dollar 15 a gallon, $1 and 15 cents per gallon extra largely to pay for dairy digesters which increase local pollution.”
At least one CARB commissioner was clearly receptive.
“I’m concerned about the irresponsibility of sending that signal… that we want to continue that crediting for another 17 years,” Dr. Diane Takvorian said. “It just doesn’t make sense to me that some purely electric systems would have a higher carbon intensity than digesters.”
A closer look at the economics makes even less sense.
“The cost of an anaerobic digester is 10 times the market value of the gas it produces,” UC Davis professor Aaron David Smith wrote on his Ag Data News Blog on April 14. “Digester revenue has been substantially higher than the value to society of prevented methane emissions.” The better course “would be if the cost of methane emissions mitigation were assessed on farmers like New Zealand is trying to do. The cost would be passed along to consumers in the form of higher milk and dairy product prices instead of being borne by consumers of gasoline and diesel,” he wrote.
Last year, Smith provided a breakdown of how large and nonsensical the subsidies are. A typical California dairy cow produces produces $4,977 of milk per year, and generates $2,827 in state and federal subsidies “for gas that costs $636 to produce and which it can sell for $112.50.”
But it’s worse than that, as Jamie Katz, of the Leadership Counsel for Justice and Accountability, another San Joaquin Valley EJ organization, noted in his public comment.
The purpose of the LCFS subsidies is supposedly to generate reductions that wouldn’t otherwise happen, but “for many dairy digesters, the supposed methane emission reductions were already occurring or obligated and accounted for in other programs,” Katz said. He didn’t even mention the federal Renewable Fuel Standards [RFS] program. Instead, he cited as examples eight dairy digesters funded from the Aliso Canyon mitigation agreement, and 130 funded from the Dairy Digester Research and Development Program. “As a result, many dairy digester projects are double and triple counting the same alleged reductions. Not only are these non-additional, they undermine staff’s justification for avoided methane crediting since they would not otherwise have been released into the atmosphere.”
Earth Justice attorney Sarah Gersen placed the digester problem in a concise framework of four specific harms: “First, the outside support for CNG Fuel distorts the market in favor of combustion fuels that have no role in California’s future. One CNG truck that purportedly burns livestock biomethane will typically lead to more credit generation than a fleet of four electric trucks,” she said. The reason is, she told Random Lengths, “You can get a very negative CI score for a huge subsidy if you exploit the low carbon fuel standard by burning livestock methane in these horribly polluting engines.”
Closely related is the second harm she cited: “The LCFS is undermining the market for truly clean zero-emission hydrogen by providing the biggest hydrogen subsidies to companies that produce hydrogen through the polluting process of steam methane reformation,” that is by cracking a methane molecule through exposure to very high-temperature steam, and capturing the hydrogen.
This goes back to the bogus biomethane carbon intensity is -245, Gerson told Random Lengths. “Compare that to if someone works to produce truly clean hydrogen by relying on wind and solar power to run an electrolysis process to hydrogen from water molecules the carbon intensity of that would be zero,” she said. “You would receive less of a subsidy from the LCSF program for a fuel with a carbon intensity of zero than you would for a fuel intensity of -245.”
Third, she noted “It’s not fair to expect California’s drivers to subsidize fuels that have no future in our transportation sector.” This isn’t opinion, she told Random Lengths. “We know from CARB’s own air quality planning that the only way we reach health-based air quality standards is by doing a wholesale transition to zero-emission technology.”
The fourth harm Gersen cited is that “creating a lucrative market for livestock bio methane creates a perverse incentive for factory farms to create methane through unsustainable manure management practices,” adding that “Addressing livestock methane through direct regulation will avoid this perverse incentive.”
“Livestock manure does not produce methane emissions unless it is stored in liquid manure lagoons, which is just as disgusting as it sounds,” she told Random Lengths. “Storing manure in these liquid manure lagoons leads to far more environmental and public health harms in the surrounding communities than other forms of manure management that do not, that are more sustainable and do not create methane emissions.” The use of such lagoons is relatively recent, first coming to California in the 1990s — when the problem of bio-methane contributing to global warming was already well understood. So not only are we perpetuating a problem, but it’s a problem we knew about in advance.
For an even broader view, Random Lengths spoke with Kiki Velez of the Natural Resources Defense Counsel, about the issues NRDC raised in a June comment letter. The outsized carbon reduction credits for biomethane were just the first of three “unintended consequences of the program have emerged in recent years that undermine its ability to reduce climate emissions and protect communities.”
“Methane emissions from the agricultural sector in California haven’t gone down since LCFS program was initiated and a significant portion of emissions from the livestock in the state are not manure emissions at all but are actually enteric omissions, like emissions from cows burping,” she said. “So essentially LCFS has been used as this sorted of Band-Aid to address a small number of emissions from the agricultural sector, but not in a cost-effective way and in a way that’s distorting the LCFS program which first and foremost is a transportation program.”
The second unintended consequence was that “the LCFS provides incentives for the development of lipid biofuel production on a massive scale without adequately accounting for the land use and carbon impacts of biofuels.”
“Initially in the early stages of this program, the biofuels, especially lipid-based, the oil-based biofuels, were from waste sources, for example, used cooking oil. But nowadays all of those resources are spoken for, all the cooking oil is already being used to produce biofuels,” Velez explained. So now LCFS credits are incentivizing biofuel production “to such an extent that we’re seeing massive refineries, including a Phillips 66 refinery in the Bay Area that is now converting from oil production like typical fossil oil production to bio-fuel production. And they’ve specifically cited the LCFS program and its incentives as being the reason for that.”
The impact can be huge. “If that facility alone processed only soybean oil, it would use 40% of the United States soybean supply and of course that has massive land-use impacts….If you’re pulling out 40% of United States soybean oil produced by that one plant you’re going to have US oils from other parts of the country from different feedstocks coming to replace that loss that’s now going to bio-fuel production.”
One likely replacement is palm oil, often produced in places like Indonesia, “A place with rain forests where basically forests have to be cleared to produce that palm oil. That has massive impacts on carbon sinks on climate and also on the ecosystem, even as we’re in the midst of the climate crisis and an ecological crisis.”
The way to avoid all that potential destruction is simply to cap the use of lipid biofuels.
The third unintended consequence was “The LCFS program inappropriately credits captured carbon that is utilized for CO2 enhanced-oil recovery (“EOR”) – a process in which CO2 is injected into oil fields to ‘push’ more oil towards production wells.”
“You can see how that’s contradictory to our climate goals,” Velez said, “So, we’re calling on CARB to end that practice because it’s pretty clear to us that carbon dioxide that’s captured just to produce more oil and gas is clearly at odds with the state climate goals and it shouldn’t be allowed to receive credit under clean transportation program.”
NRDC’s June comment letter also argued that CARB’s accounting for biomethane production emissions must be accurate, citing three major problems. The previously discussed problem of incentivizing more methane production was first. Second was that “Livestock biomethane production and transportation results in methane leakage that must be accounted for in lifecycle emission assessments.”
“It’s imperative that they [CARB] consider the methane leakage that might be happening both from gas when digesters are active,” Velez said, “and the same when the bio-methane is injected into the gas pipeline system…. There been scandals in recent years in terms of leakage from from the pipeline system. So it’s important to account for any potential emissions that might be leaked along the way.”
Third was that “CARB does not fully account for upstream and downstream emissions from livestock biomethane production.”
In a sense, “This is simply encompassing the first the first two pieces,” Velez said, but it’s also to argue against “the continued form of agricultural exceptionalism where the agricultural industry is just allowed to pollute and pollute and pollute, without any regulations while other sectors are being actively required to transition to a zero emissions economy,” she said. “It’s critical that CARB adopt policies to directly regulate the agricultural sector outright rather than relying on the LCFS program as a tiny band-aid solution and ignoring all of these other environmental issues.”
The exemption of agribusiness thus far reflects the larger problem of entrenched special interest power vs, the public interest, a point focused on by Earth Justice researcher/analyst Sasan Saadat in his public comment.
‘I’m not aware of any public interest groups backing continued support for these [bio-] fuels, but the current LCFS does enjoy support from agribusiness, trade associations, commodities, traders, gas, and of course oil companies,” Sadat said. “Indeed, WISPA [Western States Petroleum Association] said in Politico yesterday that they’re basically fine with the LCFS because the oil industry benefits from the program’s current form.
“So why in 2023 does the program remain so lopsided towards fuels championed by the oil and ag industry?” He asked.
“Researchers have actually studied this question of why policy continues to subsidize disproven technologies, and what they found is that for industries in decline where sunk costs rule out new entry, incumbents have a much larger incentive to defend their subsidies.
“In other words, the researchers concluded, and I quote ‘the losers lobby harder, and so it’s losers that often pick government policy.’
“I urge the board to adopt the EJ scenario instead and pry this program away from its outdated origins.”