Low-carbon fuel standards pose another threat to fuel prices

By Sen. Maureen Walsh, R-Walla Walla

Note: The following op-ed appeared in the Dayton Chronicle and Prosser Record-Bulletin during the week of Feb. 12.

During last week’s telephone town hall in the 16th Legislative District, we heard from a number of individuals concerned about the governor’s proposed gas tax increase of 30 cents per gallon. There are many concerns with the governor’s approach to addressing this issue that should be considered, including economic impact to individuals and families.

This isn’t the only proposal that would drive up gas prices. Another bill making its way through the House is likely to drive up the cost of gasoline by about 10 cents a gallon. That’s just for starters, based on California’s experience. But consultants to the state have told us the eventual impact could be much higher.

House Bill 2278 directs the state to implement a low-carbon fuel standards program, modeled after a similar program that has been under way in California since 2011. Under this program, the state would require gasoline and diesel fuel to be blended with particular forms of ethanol that have very low carbon content. It would set a target of reducing carbon emissions by 10 percent over 10 years.

Unfortunately, this type of ethanol is in limited supply. This so-called “cellulosic ethanol,” derived from tree bark and agricultural waste products, comes largely from Brazilian sugar cane. Only a handful of facilities can process it. Animal fats and used cooking oil also can be used to brew diesel fuel – most of it shipped to a processing plant in Singapore and then shipped back to the U.S.

The California Air Resources Board estimates that the standards so far have increased diesel prices 6.8 cents a gallon and gasoline prices by 9.5 cents. Many who favor this policy for Washington say this is a modest price to pay. They don’t mention that California is only a third of the way to its goal – carbon content of fuel has been reduced only 3.5 percent. California’s standards have been delayed by years of lawsuits. The crunch will come in the next two years, as California attempts to hit its 10-percent target.

This government mandate will dramatically increase the price of fuel in California. Oregon is just beginning to implement the same standards. So what happens if Washington starts competing for the same limited supply of ethanol? Prices will rise further. State consultants in 2013 estimated gasoline prices would increase 93 cents to $1.17 a gallon.

This is the most troubling element of the Legislature’s headlong rush to embrace schemes that would drive up the cost of fuel. The effort is fueled by platitudes, not reasoned analysis. Many of our colleagues fail to consider the impact on struggling families, directly and indirectly, in higher costs for fuel, food and other products we consume. Hardship will be greatest in regions like ours, where we must drive longer distances and incomes are lower than the Puget Sound region. Policies that would increase the cost of living and create a competitive disadvantage for our state’s businesses will ultimately hurt Washington’s economy.

Sen. Maureen Walsh, R-Walla Walla, represents southeast Washington’s 16th Legislative District.