If the state legislature adopts both a CO2 cap-and-trade system and a low-carbon fuel standard (LCFS) – as the budget proposed by State Senate Democrats indicates – it would add about 20 cents to the cost of a gallon of gas in 2023. That would increase to between 41 and 50 cents per gallon, using current projections, in 2028. For diesel, those numbers are even higher.
Those are on top of one of the highest state gas taxes in the country.
The LCFS and cap-and-trade are included in the State Senate budget … Both policies would add to the price of a gallon of gas. Using the fiscal notes and the experience of California and Oregon with the policies, we can estimate the total cost of adopting both. …
… Both California and Oregon have an LCFS and I used their current prices to estimate the potential cost in Washington state. In California, the current price of LCFS credits is $197 per metric ton … . Oregon’s current price is lower … at $125.74 per metric ton.
… that translates to an additional 2.4 cents per gallon of gas in 2023, increasing rapidly to an additional 23.8 cents per gallon in 2028. For diesel, the cost starts at 2.6 cents per gallon and jumps to 26.4 cents per gallon in 2028.
Using Oregon’s current price, the LCFS would add 1.5 cents per gallon of gas in 2023, increasing to 15.2 cents per gallon in 2028. Diesel costs would start at 1.7 cents per gallon and increase to 16.8 cents per gallon.
Adding those together would increase the price of gasoline by 20 cents per gallon in 2023 and increase to between 41 and 50 cents in 2028. Again, it is worth noting that the fiscal note calls these estimates “conservative.”
Diesel costs would start at 23 cents per gallon and increase to between 47 and 56 cents per gallon.
None of this accounts for an additional gas tax increase that is assumed in the cap-and-trade bill. …Read the Complete Article »