Environmental groups, consumer watchdogs, and oil companies are watching as California debates a first-of-its- kind sweeping proposal to clean up the fuel that powers California's cars.

The proposal aims to limit pollution in the form of carbon emissions from cars, trucks, and buses, which accounts for 40 percent of California's greenhouse gases.

The "New Low Carbon Fuel Standard" would cut carbon pollution 10 percent by the year 2020.

That's like removing 3 million cars from the road and rolling back pollution to 1990 levels.

Judy Dugan of Consumer Watchdog supports the proposed new standard, which also calls for more hybrids, biodiesel, and ethanol gas blends.

"What we want to see is a transportation policy that is cleaner and cheaper," she said.

She's concerned about the power and influence of the oil industry, which is voicing opposition.

"When they make a concerted lobbying push, they know everyone, they know who to talk to, who to remind where their bread is buttered," said Dugan.

Catherine Reheis-Boyd countered, "There are a lot of hurdles to make this happen."

Reheis-Boyd is the Executive Vice President of the Western States Petroleum Association, representing oil and natural gas producers and suppliers in the West.

"The problem is, and the concern for our industry, is the availability of these fuels and the affordability of these fuels and reliability," said Reheis-Boyd.

She said California regulators are rushing the new low carbon standard, which is too pie in the sky. She argues more study is needed, and that a recession is not a good time to put more strains on business.

Dugan countered, "If anyone has money right now, it's the oil business."

The new Low Carbon Fuel Standard will be voted on by the California Air Resources Board on April 23.