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Low Carbon Fuel Standard wrong for Washington: Costly, unworkable fuel policy

As part of his proposed 2019 climate agenda, the Governor wants the Legislature to take another run at imposing a Low Carbon Fuel Standard (LCFS) on Washington, despite it having been rejected twice before and despite it being an ineffective and unsustainable proposal that has been shown to increase gasoline and diesel fuel prices in other states.

A LCFS would require Washington fuel suppliers to reduce the carbon content of their fuels by either blending them with increasing amounts of biofuels, or buying “credits” from suppliers of lower carbon transportation fuels such as electricity, renewable natural gas, propane or hydrogen.

The Governor refuses to tell us how much his LCFS policy would cost Washington motorists. All we know is that it’s part of his massive spending plan that contains $270 million in new state spending, and that new spending does not include any funding for improvements to our roads, bridges or transportation infrastructure.

But we can look to the only two states that have a LCFS — California and Oregon — for insight on potential impacts on Washington.  Results to date indicate that there is no feasible pathway to compliance, a LCFS is costly to consumers and it may cause more environmental harm than good.

Research already shows that LCFS biofuel stock blends for just California’s program do not currently exist in sufficient quantities and/or cost significantly more than conventional fuels. Imposing a LCFS on Washington would increase demand on an already bootstrapped supply, which would result in even higher costs.  In addition, due to limited electric vehicle and alternative fuel vehicle infrastructure, establishing a sustainable, viable supply of “credits” is unlikely — which would lead to even higher compliance costs. This is already happening in Oregon where the price of credits has doubled.

The California Energy Commission reported that, as of December 2018, the LCFS already added 13.3 cents to the cost per gallon of gasoline and 9.5 cents to diesel.  Studies by other experts, such as Stillwater Associates, estimate that by 2030 the California LCFS could increase the cost of gasoline by 47 to 71 cents per gallon.

Washingtonians already pay the nation’s second-highest gasoline taxes – a combined 67.8 cents per gallon in state and federal levies. The cost impact of a LCFS, whether 13 cents or even more, would be another regressive proposal with hidden costs.

Higher fuel costs would increase costs for transporting goods, which would be passed on to consumers making everything we buy more expensive. The people who ultimately get hurt the most are those least able to pay more for costlier goods, services and essential needs

Even if a LCFS were to work in Washington, the Governor’s own estimates show it would not result in a significant greenhouse gas reduction, despite huge costs in higher fuel prices. Washington would have to increase reliance on out-of-state and foreign biofuels, from Brazil for example, increasing the carbon footprint of fuel imports.  It is no surprise that a dozen leading environmental groups have come out in opposition of expanded biofuel production due to deforestation, wildlife habitat destruction and undermining of climate policies.

Washington LCFS legislation failed passage last year for good reasons. Voters rejected two ballot measures that would have been increased the cost of gasoline for Washington families and businesses with limited environmental benefit.  This new LCFS proposal would be worse.

Washingtonians want cost-effective, achievable carbon reduction policies to help transition to a cleaner future. That’s why a LCFS must be rejected.

Chris Eerkes is President of Sun Pacific Energy, Inc., providing over 90 independent Washington state dealers with retail motor fuel. A native of Washington state, Eerkes resides in Kennewick with his family. He also serves as President of the Washington Oil Marketers Association.

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