The sphere of energy production is riddled with complex intertwining policies, leading to some unforeseen consequences. One such contentious issue arises from the conflict in the interactions between local and federal policies. Specifically, the consequences of the counteractive relationship between the Low Carbon Fuel Standard (LCFS) and the federal policy on fossil fuels. This contention is currently directing oil companies to shift their focus predominantly towards the production of bio-based diesel. This post aims to delve deeper into this issue and evaluate how broken policies could potentially sustain a cycle of adverse environmental impacts and economic inefficiencies.
1. The field of energy production is characterized by complex and intertwined policies leading to unintended consequences.
2. There is a conflict between local and federal policies, notably, the Low Carbon Fuel Standard (LCFS) and the federal policy on fossil fuels.
3. This tension is leading oil companies to shift their focus from fossil fuels to bio-based diesel.
4. It is more beneficial for oil companies to focus on bio-based diesel due to federal programs that promise higher returns as opposed to investing in California's LCFS.
5. The conflict between the LCFS and federal policy hinders the growth and sustainability of the green fuel industry and disrupts strategic operational planning for companies in the energy sector.
In 2020, bio-based diesel accounted for approximately 20% of the total diesel consumption in the United States.
The impact of these conflicting policies is discernible as it has become more beneficial for oil companies to recalibrate their focus towards bio-based diesel. Instead of investing in California's Low Carbon Fuel Standards (LCFS), oil companies are channeling their efforts into busying themselves with federal programs that promise higher returns. The counterproductive effects of the interaction between LCFS and federal policy creates an impediment in the growth and sustainability of the green fuel industry. This circumstance breeds an incongruous climate, thwarting strategic operational planning for these companies.