A federal judge has ruled to block California’s Low Carbon Fuel Standard, arguing that it “unconstitutionally discriminates against out-of-state producers and tries to regulate activities that take place entirely outside state boundaries.” The standard “impermissibly treads into the province and powers of our federal government, reaches beyond its boundaries to regulate activity wholly outside of its borders,” the judge said. [The New York Times]

The standard would function by using life-cycle analysis to identify the CO2 intensity of fuels. Fuel-makers whose products have lower CO2 intensity would be rewarded with tradable credits. Those selling higher CO2 fuels would have to purchase credits, driving up the cost of their fuel.

The petrochemical and fuel industries lauded the court’s decision. “California’s low-carbon fuel standards would have raised gasoline and diesel fuel costs for all Californians,” said Charles T. Drevna, the president of the National Petrochemical and Refiners Association.

Do you agree with this ruling? Does California’s LCFS tread on the federal governments interstate commerce authority? What do you expect from the appeals process? In today’s globalized society, is a government’s decision to privilege a source of energy equivalent to regulating its competitors? What impact might this decision have on broader applications of life-cycle analysis?