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Home / Washington Business - July/August 2006 / Betting the farm on alternative fuels |
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Betting the farm on alternative fuels |
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Written On: July/August 2006 |
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Written By: by Chris McCabe - Governmental Affairs Director for Environmental Policy |
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admit it. I drive a gas hog. At $3.17 for a gallon of gas, I’m shelling out about $55 to fill up my Ford Explorer. I can’t say that I’m very happy (or proud) about it, either. But things didn’t seem so bad when I bought my car: Gas was about $2.25 a gallon back then. So what’s the answer to reducing our escalating fuel costs?
Oil is a commodity and, as such, is subject to the laws of supply and demand. Demand is on the rise worldwide, with countries like China and India becoming consumers of fossil fuels rather than producers. Add a dash of terrorism and a few natural disasters—both of which affect supply—and you can see why oil is currently hovering around $70 a barrel. That’s up from about $45 a barrel this time last year.
A variety of strategies are emerging in an effort to reduce our nation’s dependence on foreign oil. New technologies—including hybrid cars, hydrogen fuel cells, biodiesel and ethanol—all aim to accomplish this goal. But will any one of these alone do the job?
Last session, the Legislature and Gov. Christine Gregoire jumped on the biofuels bandwagon and enacted ESSB 6508. The new law mandates that, by November 2008 (or sooner, if Washington feedstock will support it),
2 percent of all diesel fuel sold in Washington will contain biodiesel. The law also requires that, by December 2008, 2 percent of all gasoline sold in this state will contain ethanol. This "volume metric" mandate is placed on special fuels licensees (i.e. oil companies). If the mandate is not met, a financial penalty applies. Effective June 2009, the state will share in the mandate by using a 20 percent blend of biodiesel in all diesel-powered vehicles, vessels and construction equipment.
The premise behind the biofuels mandate was clearly spelled out in the bill’s intent section: "Establishing an alternative fuels market will reduce our dependency on imports of foreign oil, improve our health and quality of life, and stimulate the creation of new industry for our farmers and rural communities." It sounds great in theory, but will mandates really work?
"Alternative fuels come with many benefits, and AWB has a long history of supporting their production and use," AWB President Don Brunell said. "Unfortunately, mandating their use is not the right approach. The alternative fuels market seems to be thriving on its own, and government should not be in position of picking winners and losers within that market. For this reason, AWB opposed ESSB 6508."
According to a May 10 article in The Seattle Times, Imperium Renewables will complete a refinery in Grays Harbor County by the end of 2007 that could produce as much as 100 million gallons of biodiesel per year. The plant is a boon to the economically challenged Aberdeen/Hoquiam area, but the plant would rely largely on resources not produced by Washington’s farmers. Instead, it will use Malaysian palm oil and soybean oil produced elsewhere in the United States. This contradicts the very intent of the legislation.
As for reducing our nation’s dependency on foreign oil, biodiesel and ethanol use would still not curb America’s appetite for oil. According to the U.S. Energy Information Association, oil exports are expected to increase 10 percent over the next 20 years as Americans use more oil but produce less in the United States.
Given today’s world environmental outlook, the time may have finally come for Detroit to develop a mass-produced alternative to the internal combustion engine. In addition, Americans must get serious about exploring for domestic reserves of oil while continuing development of alternative and renewable fuels. Is ESSB 6508 the appropriate first step toward this goal? From AWB’s perspective, Washington should continue to pursue the development of alternative fuels. However, it’s apparent the mandates contained in this law do little to help Washington farmers or reduce our dependency on foreign oil.
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