Greens’ claims about costs of a biofuel mandate riddled with errors and contradictions

Low-carbon fuel standards increase prices. That reality is, however, politically inconvenient. Advocates of HB 1091, which would impose a low-carbon fuel standard (LCFS), continue to pollute the discussion with silly claims in an effort to hide what is a simple truth.

Most recently, Climate Solutions published a two-page flier on the cost of the LCFS, purporting to show that it doesn’t increase costs. OK, they later say, it does increase costs but not much. Then they retreat to the claim that it may increase costs a significant amount, but oil companies should pay for it. …

The piece put together by Climate Solutions is so full of basic factual errors and contradictory information, I thought I would address them in one place.

Claim: “California’s standard has been in place for a decade. The average price of gas in the state is actually less today than it was at the beginning of the program!”

Reality: False. According to the Energy Information Administration, when California’s LCFS began in January 2011, the average cost of a gallon of gas was $3.35. Today it is $3.54, about 19 cents higher. …

Prices fluctuate for a variety of reasons, so this talking point is misleading to start with. Even so, it is remarkable that they continue to use a talking point that is demonstrably inaccurate.

Claim: “It is clear that higher clean fuels prices do not equate to higher gas prices.”

Reality: The state of California and Oregon say this claim is false. The California Air Resources Board (CARB) says at $100 per metric ton, an LCFS will increase the price of a gallon of gas by 12 cents per gallon for every 10 percent reduction in carbon intensity – 2028 in HB 1091. The current California price per credit is $199, which calculates to 24 cents per gallon.

Staff at Oregon’s Clean Fuels Program put the price increase for a $100 credit at 11 cents per gallon when the LCFS is fully implemented and even provide a formula to calculate the result. …

Claim: “In California, any costs associated with the Clean Fuel Standard have been far lower than projected.”

Reality: False. In 2015, CARB projected the highest potential cost of LCFS credits would be $100 per metric ton by 2020. At the time they claimed that price “likely over-estimates costs.” The actual cost in 2020 – in the middle of a dramatic decline in demand for gas during the COVID lockdown – reached $206, more than double the projection. …

In reality, prices have been more than double what CARB projected as a worst case. …

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