The base deficit for individual companies is calculated the same as in the current approach. However, individual companies only incur an Incremental Deficit if their own crude slate becomes more carbon intensive over time relative to their crude slate refined in the baseline year. This allows for individual companies to shift the crude slate they refine in California and not be penalized as long as the average CI of their own crude slate does not increase. Base Deficit: All producers of gasoline (diesel) will calculate a deficit “Base” using the difference between the average Lookup Table value for CARBOB (ULSD) and the compliance target in that year. This calculation is the same as currently in the regulation on page 52 and will be the same for each company regardless of their own crude slate. Company-Specific Incremental Deficit (Approach A): For each oil company: A volume of HCICO would be determined using the crude slate “baseline” refined by that company in CA during the baseline year. Each year of the regulation, a volume of HCICO would be “current” calculated using the crude slate refined by that company in CA during a prior year. If the volume of HCICO is greater than its company’s “current” “baseline” volume of HCICO, then the company will incur an incremental deficit calculated using the difference between the current volume and the baseline volume. An individual company can earn credits if it purchases crude from sources that have implemented innovative methods such as CCS to reduce emissions for crude recovery. The number of credits will be tied to the emissions reduction achieved by the innovative method. Company-Specific Incremental Deficit (Approach B): For each oil company: A CI value would be calculated using the crude slate refined by “baseline” that company in CA during the baseline year. Each year of the regulation, a CI would be calculated using the “current” crude slate refined by that company in CA during a prior year. If the company-specific CI is greater than the “current” “baseline” company-specific CI, then the company will incur an incremental deficit calculated using the difference between its current CI and its baseline CI.
The base deficit for individual companies is calculated the same as in the current approach. However, individual companies only incur an Incremental Deficit if their own crude slate becomes more carbon intensive over time relative to their crude slate refined in the baseline year. This allows for individual companies to shift the crude slate they refine in California and not be penalized as long as the average CI of their own crude slate does not increase. Base Deficit: All producers of gasoline (diesel) will calculate a “Base” deficit using the difference between the average Lookup Table value for CARBOB (ULSD) and the compliance target in that year. This calculation is the same as currently in the regulation on page 52 and will be the same for each company regardless of their own crude slate. Company-Specific Incremental Deficit (Approach A): For each oil company: A “baseline” volume of HCICO would be determined using the crude slate refined by that company in CA during the baseline year. Each year of the regulation, a “current” volume of HCICO would be calculated using the crude slate refined by that company in CA during a prior year. If the company’s “current” volume of HCICO is greater than its “baseline” volume of HCICO, then the company will incur an incremental deficit calculated using the difference between the current volume and the baseline volume. An individual company can earn credits if it purchases crude from sources that have implemented innovative methods such as CCS to reduce emissions for crude recovery. The number of credits will be tied to the emissions reduction achieved by the innovative method. Company-Specific Incremental Deficit (Approach B): For each oil company: A “baseline” CI value would be calculated using the crude slate refined by that company in CA during the baseline year. Each year of the regulation, a “current” CI would be calculated using the crude slate refined by that company in CA during a prior year. If the “current” company-specific CI is greater than the “baseline” company-specific CI, then the company will incur an incremental deficit calculated using the difference between its current CI and its baseline CI.
82-20111025workingdraftreport.e2edits.docx