LCFS, round 4

For the past four consecutive legislative sessions, lawmakers have introduced proposals to impose a low carbon fuel standard (LCFS) in Washington state. …

Much of the discussion during a Jan. 14 public hearing on the bill in the House Committee on Environment & Energy rehashed arguments made in years past by both proponents and critics.

… [A]n analysis for the Puget Sound Clean Air Agency (PSCAA) examining the impact of such a proposal on reducing particulate matter (PM2.5) found that even without an LCFS, PM2.5 levels are expected to decrease by 68 percent by 2030 “mainly as a result of federal vehicle standards reducing PM2.5 emissions,” while the potential impacts of an LCFS “are small in comparison.”

Supporters also argue an LCFS would promote the growth of the biofuel industry in the state, which currently sends its product to California and Oregon where LCFS programs have already been set up. …

Yet BP America Communications Director Tom Wolf told the committee that while the company produces biofuel in Washington, “there’s no incentive to sell that fuel in Washington state. I can’t guarantee we’re going to produce more. We will respond to the market, and I’m sure other companies will as well.” …

Further, critics point to a 2020 study by Stillwater Associates which concluded that more than 70 percent of the financial value from compliance credits would be purchased from out-of-state producers. …

Disputes among stakeholders include how cost effective an LCFS is in reducing carbon emissions and the impacts on fuel prices. … [D]etractors point to a 2018 report by California’s nonpartisan Legislative Analyst’s Office (LAO), which concluded: “most or all of the costs of purchasing credits and allowances are likely passed on to fuel consumers in the form of higher retail prices.”

At the time, the report estimated the program had added $.13 per gallon, with the potential for a total increase of $.46 by 2030. Oregon’s LCFS program, created in 2009, is only 15 percent implemented.

… [A] recent [study] conducted by the PSCAA when it was considering its own regional program may offer the most accurate picture of what Washington could expect financially. That analysis concluded that an LCFS could raise regional gas prices by $.57 per gallon by 2030, while another follow-up Stillwater Associates study concluded it would cost households in that region $900 annually.

Paul Graves with Oak Harbor Freight Lines told the committee that because of California’s LCFS program, “the cost of everything that touches the truck is higher in California than it is in the rest of the country.”

Billy Wallace is the political and legislative director for the Washington-North Idaho District Council of Laborers. He told the committee an LCFS would represent “another regressive tax” placed on his members. “As much as we try to emulate and want to be like California, this is one time that we should learn from their mistakes.” …

Washington Policy Center Environmental Director Todd Myers told the committee an LCFS is an incredibly expensive way to reduce carbon, highlighting GHG reduction programs pursued by entities such as Seattle City Light.

“For just $25 million, we could get the same C02 reductions in 2021 that an LCFS would produce in the year 2030,” Myers said.

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