What Is a Low-Carbon Fuel Standard (LCFS)?
Sold to the public as a way to clean up our transportation fuels while cutting down on the amount of carbon dioxide emitted into the atmosphere, in reality the Low-Carbon Fuel Standard (LCFS) isn’t about making the fuels in your car any better, cleaner or more affordable than it already is – it simply seeks to render those fuels more difficult to find and even more expensive to purchase.
State of Play: LCFS in Washington State
Late last year, the Washington Policy Center made public the contents of a classified memo from Gov. Chris Gregoire’s chief of staff laying out a sophisticated plan for implementing the California LCFS model in Washington. The memo reveals that the ultimate objective of the Washington LCFS is to force regulators in Washington, D.C. to impose a similarly destructive mandate nationwide.
Two weeks after receiving that document, Gov. Gregoire issued Executive Order 09-05 – directing her cabinet to “assess whether the California low-carbon fuel standards … would best meet Washington’s greenhouse gas emissions reduction targets.” Consultants were hired and public workshops were scheduled. And even though serious questions remained unanswered (“Is the policy ahead of the science?” asks one agency PowerPoint), Washington regulators commenced with their work. The governor is expected to announce what comes next in July.
Production and Distribution: How/Where Does Washington Get Its Energy?
Washington has few fossil fuel resources, but with five refineries, the state is a principal refining hub for the Pacific Northwest. In fact, according to the Energy Information Administration, the refining capacity in Washington is about 627,850 barrels/day. While these refineries receive most of their oil each day via tanker from Alaska, declining production there means that Washington’s refineries will soon become increasingly dependent on crude imports from Canada and elsewhere. Additionally, the Trans Mountain Pipeline from Alberta supplies more than one-tenth of Washington’s crude oil.
Washington gets some of its oil from Saudi Arabia, Angola and Argentina as well, but more than 25 percent of its total haul comes from Canada – supplies that would be targeted for elimination under an LCFS. The chart below captures the relevant percentages.
LCFS Impact on Washington State
Since Washington receives more than 25 percent of its crude from Canada, a quarter of the state’s secure, affordable oil supply would be threatened under an LCFS. Also, about 10 percent of the state’s gasoline – refined in Montana, but derived from Canada’s oil sands – would also be prevented from crossing the eastern border.
How would Washingtonians make up the difference? Increasing imports from the Middle East, currently residing at nine percent of the state’s energy consumption or relying on the use of hydrogen and electric plug-in cars that will not be commercially viable for decades.
And what about jobs? Refiners in Washington directly employed 2,003 workers in 2007 (latest numbers), and indirectly supported another 20,000. They paid out more than $400 million in wages. And they sent nearly that same amount to Olympia in the form of sales, excise, occupation and sundry other taxes.
