California air regulators on Thursday approved a sweeping plan to reduce greenhouse gas emissions from fuel produced and sold in the state, despite objections from oil companies about the cost.

The California Air Resources Board voted 9-1 to adopt Gov. Arnold Schwarzenegger's low carbon fuel standard, one of the cornerstones of AB 32, the landmark greenhouse gas reduction law signed in 2006. The standard calls for a 10 percent reduction from 2006 levels of greenhouse gas emissions from transportation fuels by 2020.

To meet this standard, oil companies will have to switch to gasoline and diesel fuels with lower carbon content. The standards create a demand for alternative fuels, such as biofuels, natural gas and hydrogen, and could also drive up the market price of traditional fuels.

Oil companies had argued that the regulation would cost California drivers and consumers nearly $4 billion a year and that the costs of making the transition to low-carbon fuels were not adequately considered by the air board. There was also opposition to the methods the air boards used to calculate carbon emissions from alternative fuels.

Air regulators countered that the regulation would save motorists $3 billion a year and would reduce the state's dependence on oil and natural gas.

"The new standard means we can begin to break our century-old dependence on petroleum and provide California with greater energy security," Mary Nichols, chairwoman of the air board, said in a statement after the vote. "The drive to force the market toward greater use of alternative fuels will be a boon to the state's economy and public health. It reduces air pollution, creates new jobs and continues California's leadership in the fight against global warming."

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