The legislation at issue aims for a 20% reduction in the state’s car and truck pollution by 2035. It would achieve this by restricting the amount of pollution released in the making and use of fuel, and by penalizing fuel producers that don’t meet those standards.
Producers of transportation fuels with heavier climate footprints — mostly gasoline and oil — would need to either blend in biofuels to meet the pollution standard or buy pollution credits from competitors that make more climate-friendly fuels.
Gov. Jay Inslee and allies in the Democrat-controlled Legislature have pushed for a low-carbon fuel standard for years, only to be undone by opposition from the oil industry and others who insist higher pollution standards will raise fuel costs.
This year’s bill, House Bill 1091, cleared the state House of Representatives, 52-46, and passed a Senate committee hearing Tuesday morning. While boosters celebrate the bill’s progress, it may yet land before the Senate Transportation Committee — the place where the idea stalled in 2019 and 2020.
The Transportation Committee chairman, Sen. Steve Hobbs, D-Lake Stevens, declined to put the legislation up for a vote both years, and still isn’t smitten with it.
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“I am not a fan of this policy,” Hobbs said Tuesday, before declining to vote for or against the bill during an Environment, Energy and Technology Committee hearing.
Jerrod Bishop of Wenatchee, Washington, plugs his electric car into a public charging station in Seattle in January. The clean-fuel standard being considered by the Washington Legislature would reward companies that adopt the use of more climate-friendly fuels such as electricity and penalize companies whose products destabilize the Earth’s climate system. (Dan Delong/InvestigateWest)
Whether Hobbs can keep the bill from the Senate floor isn’t yet clear.
Hobbs is emphatic that the proposal will have to pass through his committee. Rep. Joe Fitzgibbon, a West Seattle Democrat and three-time prime sponsor of the legislation, is equally certain Hobbs won’t be in a position to block its path to the Senate floor for a third time.
Fitzgibbon said he expects the bill to bypass the Transportation Committee entirely. In any case, he said, Senate leadership has “been very clear with me that they intend to pass this out of the Senate this year.”
Depending on how the bill changes in the Senate Ways & Means Committee, the clean fuel standard may or may not go to the Transportation Committee, said Sen. Marko Liias, the Democratic floor leader in the Senate. It is up to Liias and two legislative attorneys — one Republican and one Democrat — to determine the route the bill will follow if it passes Ways & Means.
“We make committee referral decisions based on the latest version of the bill, so we won’t know with total certainty until after the Ways & Means Committee considers the bill and reports something out,” said Liias, a Snohomish County Democrat who voted for the bill in Tuesday’s committee hearing.
The bill’s critics point to cost concerns, often citing a worst-case forecast that suggested the fuel standard could increase the cost of gasoline by 57 cents a gallon by the 2030s. The same Puget Sound Clean Air Agency study noted, however, that increases in fuel efficiency will likely make up for increases in fuel prices.
Fitzgibbon said the estimated price increases have been cherrypicked, and it’s not known what costs oil companies will pass along to consumers. In Oregon, which adopted a similar fuel standard in 2016, the cost of the program was about 3 cents a gallon in 2019.
“At some point, you start to ask, ‘What is the value of avoiding the worst impacts of climate change?’” Fitzgibbon said by phone. “I think most Washingtonians would say, ‘Yes, that is worth it.’ ”
While the state Department of Ecology has yet to draw up details of the Washington system, the intended upshot is simple: More Washington drivers would be behind the wheel of cars powered by electricity or biofuel.
Sen. Steve Hobbs, D-Lake Stevens, gives high-fives as he enters the Senate chambers at the start of the newest legislative session, Jan. 12, 2015, in Olympia, Wash. (Elaine Thompson/AP)
If enacted, the legislation will set a carbon pollution standard against which transportation fuels would be judged. Fuels that don’t meet the standard would generate debts to the producers, while fuels that exceed them would generate credits, which could be sold to the debtors. The standard would gradually tighten.
Fossil fuel producers could meet the standards by blending ethanol into fuels, selling lower-carbon fuels like biodiesel, making improvements to oil refineries, funding carbon-capturing projects or investing in electric vehicles and charging stations. They could also buy credits from fuel producers — including electric utilities — that sell lower-carbon fuels, effectively subsidizing them.
The bill also would require electrical utilities to use some of the money they make selling credits to underwrite new charging stations and build out infrastructure for electric vehicles. As the number of electric cars on the roads grows, the demand for charging stations is expected to increase considerably over the next decade.
The bill faces opposition from the oil lobby, as well as the agricultural and trucking industries, several unions and associations representing the building trades. Almost all the criticism is driven by concerns about potential costs to business owners and consumers.
If fuel prices rise for trucking companies, consumers will ultimately pick up the tab, said Paul Graves of Oak Harbor Freight Lines, an Auburn-based firm employing 1,300 drivers and support workers around the West.
“Working families will pay more not just for a gallon of gas, but for their groceries and everything they buy,” Graves said during a January hearing on the bill. “We think it’s the wrong time to be raising the cost of living across the board for working families, especially when there are better ways to reach our carbon reductions.”
Some Republican objections are grounded in the claim that the bill would have the government, in their view, picking winners and losers. Sen. Doug Ericksen, R-Ferndale, described the fuel standard as “a mechanism that moves money between private corporations to benefit certain activities.”
“The person who is driving an F-150 is going to pay an inflated price for their fuel in order to subsidize a person who is buying an electric car,” Ericksen said.
In a related critique, Hobbs said the standard would push billions of dollars to biofuel manufacturers. The money, Hobbs said Tuesday, “is not going to transportation, it’s not going to the people of Washington. It’s going to biofuels producers.”
Speaking at Tuesday’s hearing, Hobbs said the bill may have a “path forward” if unspecified “off-ramps” are added. The senator did not return requests for comment.
While a clean fuel standard would increase costs for fuel companies, it’s not clear when or whether consumers will feel a pinch. Gas prices swing wildly from month to month and place to place; gasoline in Seattle, for example, sells for about 23 cents a gallon more than the state average, which the Department of Energy pegged at $2.76 in February.
Offering the caveat that fuel prices are “difficult to predict,” a Puget Sound Clean Air Agency analysis found that a clean fuel standard wouldn’t increase the cost per mile for drivers of a gasoline-powered cars — partly because expected increases in fuel efficiency will offset increased costs.
Critics of the proposed standard point to another finding in the 2019 Clean Air Agency report — that the restrictions could, in a worst-case scenario, increase gasoline prices by 22 to 57 cents per gallon by 2030. Diesel fuel, under that analysis, could rise 24 to 63 cents per gallon.
British Columbia, Oregon and California have all had clean fuels programs for years, and those programs haven’t caused spikes in fuel prices.
“It’s not theoretical, but a demonstrated, effective strategy” to combat climate change, said Stu Clark, a policy adviser with the Department of Ecology. “Counter to fears expressed loudly by some, there have been no price spikes, no fuel disruptions and no unintended consequences.”
Proponents of the clean fuel program argue that oil industry interest groups have overblown cost concerns. The price of gas moves with a world market, and already includes hefty profits for fossil fuel companies.
“The oil companies have been among the most profitable companies in human history, and there’s no reason why they need to pass their compliance costs on to the public,” said Fitzgibbon, the bill’s sponsor.
The program will inject competition into a fuel system dominated by a handful of huge oil companies, said Leah Missik, transportation policy manager at Climate Solutions, a Seattle-based advocacy organization.
“For a long time we’ve subsidized the oil industry, and they’ve held a near monopoly as the clean fuels producers have been trying to get their foot in the door,” Missik said. “They’re really fighting this program because they don’t want that competition.”
As pollution restrictions ramp up under the program, it’s expected that fossil fuel companies would increasingly invest in the infrastructure needed to replace gasoline-powered cars and trucks with electric vehicles, Missik said.
So far in Oregon, most fossil fuel producers looking to meet fuel standards have done so by adding ethanol to gasoline and biodiesel to diesel fuel. This reduces the overall carbon footprint of the fuel and allows producers to avoid buying pollution.
Trucking companies, petroleum refiners and farming firms number among the business interests fighting a proposal in the Washington Legislature to require more climate-friendly fuels. Opponents argue that increased costs for trucking will saddle consumers with higher prices. Supporters point out that fuel prices already jump around, and that impacts in California and Oregon from similar legislation have produced relatively modest price increases. (Paul Joseph Brown/InvestigateWest)
Boosters of biofuels note that biodiesel produces only about a quarter of the carbon pollution left by its petroleum counterpart. Biodiesel also can be used in cars already on the road, allowing for a rapid reductions in air pollution.
“It’s molecularly identical to its petroleum-based counterparts,” said Zach Shelton of Mahoney Environmental, a biofuels firm with a collection center in Seattle. “The infrastructure around us is totally compatible with what me make, because it’s sustainable.”
For more than a decade, Shelton and his coworkers have scoured the Seattle area for a treasure most consider trash — used cooking oil.
Each year, he and the nine other workers at Mahoney Environmental’s processing plant in Seattle’s Georgetown neighborhood clean 1.5 million gallons of used oil so it can be shipped to a refinery and turned into biodiesel.
It bothers Shelton, 47, and others keen on biofuels that so little of it comes back to Washington. Lacking a clean fuel standard, Washington hasn’t created much demand for cleaner-burning alternative fuels.
“Right now, Washington is not a viable marketplace for renewable fuel,” said Shelton, who heads Pacific Northwest operations at Mahoney, a subsidiary of biofuel giant Neste. “Washington has failed to take a leadership role, and so we’re behind.”
Used cooking oil collection is a small piece of a much larger biofuel system proponents envision. Already, U.S. biofuel refineries, most of which convert corn into fuel, produce about 1.7 billion gallons of biodiesel annually.
Washington already has more biofuel production capacity — 112 million gallons a year — than Oregon and California combined. By comparison, the state’s five oil refineries can process 27 million gallons of crude a day.
A clean fuel standard alone won’t bring a biofuel boom to Washington. State pollution restrictions make it difficult to build large industrial facilities, and biofuel refineries do pollute.
“We haven’t fixed the current problem with permitting in this state,” Hobbs said Tuesday, shortly before he declined to vote for or against the clean fuel standard. “If you think bio-refineries are going to come to the state, it’s probably not going to happen.”
To build up a more robust biofuel system, Washington lawmakers would have to review, and perhaps relax, environmental regulations. In January 2020, Phillips 66 executives cited uncertainties about state environmental regulations when they scuttled plans to build a biofuel facility at the company’s Ferndale refinery. It would have been the largest biodiesel plant on the West Coast.
“When you’re talking about investing in the hundreds of millions of dollars, you want to make sure you’ve got some surety that a project is going to move forward,” said Carol Sim, a leader with a Washington State University group researching renewable fuels.
The clean fuels legislation would require Washington State University to identify sites where low-carbon transportation fuel projects can be developed. The Department of Ecology also would be required to plan for environmental impacts associated with the expansion of the low-carbon fuel system.
Sim is the assistant director of ASCENT, a 16-university effort to make air travel more sustainable. Part of that work involves scaling up biofuel use in the aviation sector.
The fuel standard exempts aviation and marine fuels, and it delays implementation of rules related to agricultural fuels. Sim expressed confidence that investments in biofuels will benefit industries likely to rely on liquid fuel for decades to come, including aviation and shipping.
A vibrant biofuel market in the state could spur research into alternative fuels for those difficult-to-electrify industries, Sim said. In her view, broad, incremental advances are needed to cut carbon emissions in Washington.
“It needs to be an all-of-the-above approach,” she said. “It’s not going to be a silver bullet.”
The clean-fuels standard legislation is expected to be put to the Senate Ways & Means Committee in coming days.
