Report posted Jan. 4, 2010, at 4:57 p.m. CST

The governors of 11 Northeast and Mid-Atlantic states signed a memorandum of understanding (MOU) on Dec. 30, committing to develop a regional low carbon fuel standard (LCFS). The initiative was first implemented in July 2008 when Massachusetts Gov. Deval Patrick sent letters to other governors in his area proposing that the region evaluate the possibility of implementing a LCFS program. A letter of intent was signed by 11 states later that year in which each state committed to examining low carbon fuel supply options and developing a framework for a regional LCFS. In July 2009, the Northeast States Center for a Clean Air Future completed a study conducted on behalf of the states.

In the December MOU, the governors of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont committed to developing a framework for the LCFS program by 2011.

According to information released by Connecticut Gov. Jodi Rell, the joint effort to establish a LCFS will promote the use of fuels that reduce greenhouse gas (GHG) emissions, reduce exposure to gasoline price spikes, foster energy independence and create new jobs through clean energy technologies. A press release issued by Delaware Gov. Jack Markell also stated that a regional LCFS is expected to spur economic growth related to the development of advanced technologies and green energy jobs, while facilitating the long-term transition from petroleum-based fuels in the transportation sector.

The MOU states that the overall goal of the program is to reduce the average carbon intensity of transportation fuels. According to the MOU, heating fuels could also be regulated. To achieve this goal, the states signing the MOU will evaluate and develop a framework for the program as well as a model rule based on that framework. This includes key program elements that could be adopted by state rulemaking procedures or legislation.

According to the MOU, the program framework will be finalized by early 2011 and contain the following elements:

Goals expressed as a percent reduction from an agreed upon baseline that are to be achieved over a specific timeline

Regulated parties

Whether heating fuels will be included in the LCFS, and options for including such fuels in the event they are regulated

Mechanisms for creating and trading credits for the sale of low carbon fuels

Monitoring, compliance and enforcement mechanisms

Under the MOU, signatory states have committed to participate in and provide data that is necessary to complete an economic analysis, which will provide an assessment of existing and potential fuels that can be used to achieve the LCFS goals. The states also have committed to determining the carbon intensity of fuels based on the best available science, including emissions resulting from land use changes attributable to fuel production.

"This agreement puts the participating Northeastern and Mid-Atlantic states on the low-carbon road to the future," Rell said. "These 11 states will create a larger market for cleaner fuels, which could help drive down prices when compared to the costs of ‘boutique' markets created when states act independently. It will also reduce emissions associated with climate change. This is a logical next step in our work to protect the future of this planet for our children and grandchildren."