January 16, 2020

Diverse coalition of family firms, unions oppose low-carbon fuel standard (w/video)

By: Andrew Lenderman   Comments: 0
Paul Graves of Oak Harbor Freight joins AWB Govnerment Affairs Director Mike Ennis (not pictured) on Thursday, Jan. 16, 2019, to testify in the Senate Environment, Energy & Technology Committee against Senate Bill 5412, which would implement a low-carbon fuel standard. (Photo: Brian Mittge/AWB)

A diverse coalition of trade unions, farmers, family businesses and builders joined AWB to oppose a low-carbon fuel standard (LCFS) Thursday in the state Senate.

An LCFS would increase costs for commuters and the transportation industry, which will simply be passed on to consumers through higher costs on everything from medicine to food, opponents testified. And none of the money generated by the new program will help Washington rebuild its crumbling roads.

AWB's Mike Ennis summarized the opposition of the employer community for two reasons:

"One, it will not have a meaningful impact at reducing emissions in the transportation sector, and secondly, it will cost a lot," Ennis told the Senate Environment, Energy and Technology Committee.

Senate Bill 5412 directs the state Department of Ecology to create a Clean Fuels Program, with the goal of lowering greenhouse gas emissions in the transportation sector 20 percent by 2035.

The program would create "carbon intensity standards" for gasoline, diesel and its substitutes, like ethanol or biodiesel. It would also allow the creation of "credits" which could be traded and sold.

Energy-related activities that are below the state standard, like electric vehicle charging stations, would create credits. In Oregon, for example, the state's clean fuels program sets a yearly standard. Regulated parties that don't meet that standard create deficits. Those that exceed the standard create credits. The regulated parties, such as importers of gasoline, are required to balance their credits and deficits each year. 

Ken Dobbins, of Dobbins Farms in Clark County, discusses the cost and three-month expiration date on ethanol fuels during testimony against Senate Bill 5412. With him, from left: Mike Clayton of Red Apple Orchards near Lake Chelan and Taylor Perrault of Perrault Farm in Yakima County.
Supporters say it's good for public health, and spurring innovation in the biofuels industry. But Ennis pointed out that, overall, the gross regional product would take a $1.5 billon hit, and that diesel prices could rise as much as 63 cents per gallon, and gasoline by 57 cents per gallon.

Paul Graves of Oak Harbor Freight Lines explained the impact.

"The ultimate result is that everything that gets shipped on a truck, which is anything that any consumer buys, including groceries and prescription drugs, will ultimately cost more, will act as a regressive tax," he said.

Meanwhile, Washington's road budget has a more than $400 million shortfall, the state needs about $275 million to replace road culverts for salmon, and there's been a $67 million reduction in gas tax revenue due to more efficient vehicles, State Sen. Steve Hobbs said.

Hobbs also pointed to a state study in California, which has its own low carbon fuel standard, that said the standard "is the least effective way of dealing with carbon."

"The best way of dealing with carbon is carbon pricing," said Hobbs, who also chairs the Senate Transportation Committee. "I know there was a comment there that says, 'Show me something better.' Hey, I have something better, it's called Forward Washington, which does have carbon pricing."

The session is still in its first week. But the low-carbon fuel standard has already emerged as a major priority for Gov. Jay Inslee.

Capitol correspondent Jerry Cornfield of The Herald took a look at the battle lines over this program, and Hobbs' Forward Washington idea.

For more information on transportation issues, please contact Mike Ennis at MikeE@awb.org.