Tesoro Sues California Over Ethanol Mandate

Despite the lawsuit, the company is still actively investing $15 million to $25 million to upgrade its two Californian refineries to meet the state's new ethanol mandate, said Sarah Simpson, vice president of corporate communications for Tesoro.

Coleman said he was concerned that the lawsuit might lead other refineries in the state to delay or abandon plans to increase ethanol blending.

Rick Kment, biofuels analyst with DTN, on Thursday said it was too early to say if the lawsuit would have an effect on the ethanol industry.

If California waters down or eliminate its ethanol mandate, then other states could follow suit, he added.

"Where California goes in energy, the country seems to follow," Kment said.

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