It's going to be hugely embarrassing for Gov. Jay Inslee and Washington state as a whole if the Democrat-controlled Legislature doesn't get its act together and pass a low carbon fuel standard (LCFS), otherwise known as a clean fuels bill, for the fourth year in a row.
California passed its version of a clean fuels bill back in 2007, British Columbia followed in 2008, and Oregon passed one in 2015. So far, in all of the policy's iterations in Washington, the bill hasn't even made it to the Senate floor. Even after passing the House twice, the LCFS has pretty much been DOA once it reached the Senate Transportation Committee.
This year, however, Washington Rep. Joe Fitzgibbon (D-West Seattle), the prime sponsor of HB 1091, is optimistic that the fourth time will be a charm because passing a LCFS is more of a priority for the current Democratic majority than it has been in the past.
What's a Low-Carbon Fuel Standard?
An LCFS—ignore that ugly acronym—would establish a clean fuel economy and reduce transportation emissions, which are the biggest sources of greenhouse gas emissions in Washington state.
The legislation is two-fold. First, the law limits gas and diesel emissions to 10% below 2017 levels by 2028 and 20% by 2035. Second, the program creates its own marketplace that incentivizes the production of alternative fuels (biodiesel, renewable diesel, ethanol, etc.) through a credit system, where big carbon producers (hello, Big Oil) can buy credits from those clean fuel producers to offset carbon-intensive emission deficits. In turn, alternative fuel production is funded, and the fuels become cheaper and more widespread.
The policy differs from a carbon tax or a cap-and-trade program because, while those policies make carbon and fuel more expensive, they don't make alternatives cheaper. An LCFS incentivizes producers to emit less carbon while also incentivizing the use and production of alternative fuels.
The money from the system goes right back toward clean fuel production. The LCFS marketplaces help fund the entire vertically integrated "well to wheel" process of refining, transporting, and selling alternative fuels.
"Opponents criticize that aspect," Fitzgibbon said about the state not making any money. "It’s not a tax. Not every environmental policy needs to be a tax."
What's the Holdup?
Sen. Steve Hobbs, the Chair of the Senate Transportation Committee, is a big ol' Scrooge about the LCFS.
"I'm pretty much opposed to it," Hobbs told me in an interview last week, "Because I’ve been trying to pass a transportation package, and the low carbon fuel standard increases the cost of gas and we don’t get anything from it."
"The bottom line is I'm never going to say never because this is a democracy and there’s always wiggle room to make deals and there's always language we can put in there and off ramps where every bill can work," he added. "There are different versions of it. Maybe it’s a different version of it that passes. It's only the second week of session, so anything can happen. It’s a magical place here."
Hobbs prefers a carbon tax because those revenue increases could create the funding he sorely wants for highway expansions and improvements to the precious Highway 2 trestle, and he thinks the LCFS’s potential to increase gas and diesel prices will make passing a transportation package more difficult.
These same arguments stalled the bill in the transportation committee in years past.
"I think we have a pathway that doesn’t rely on Sen. Hobbs to get it on the Governor's desk," Leah Missik, the Washington transportation policy manager with Climate Solutions, told me. According to Missik, the Democratic caucus as a whole has signaled their strong support of the bill.
Lawmakers have yet to refer the bill to a committee, so they may end up just picking another committee to run the bill through.
Finally, a Way Forward
Fitzgibbon grounds this new optimism in the results of the 2020 election. Even though the Democrats didn't increase their majorities in the Senate, the election weeded out some legislators who weren't hyped on climate action, such as Sen. Dean Takko (D-Longview).
"The seats we picked up are much stronger champions for climate policy," Fitzgibbon said, citing Sen. T'wina Nobles (D-Tacoma), a co-sponsor of the LCFS Senate bill. Nobles did not respond to a request for comment.
In the past, other big climate bills, like the 100% clean energy bill in 2019, "let some members off the hook," according to Fitzgibbon. Because members could feel satisfied voting for clean electricity, they didn't feel the need to also vote for clean fuels.
"This year, this is the top priority," Fitzgibbon said. "For the governor, the environmental community, and the legislative Democrats, this is the must-do climate bill."
On top of all of that, Fitzgibbon said that most of the Democratic caucus is keen on passing a transportation revenue package this year. He and other LCFS sponsors stressed to those lawmakers that an LCFS policy is necessary to pass that transportation package and to invest in transportation systems.
Part of the worry in that realm is that the House transportation package currently on the docket also includes a carbon fee. Will legislators enact two carbon-limiting policies that could impact the price of gas? A carbon fee could add a moderate increase—around $1, according to the Seattle Times.
Despite the messaging from the oil industry, an LCFS could drive gas prices down since, if it works, it could build out a more robust local biofuel industry to provide gas alternatives. Since implementing an LCFS, neither California nor Oregon has experienced dramatic gas price increases.
As it stands now, Washington imports its petroleum because the state has limited crude oil and natural gas reserves. "This is an opportunity for Washington to produce more of our own fuels," Fitzgibbon said. He cited Washington's farms and forests as biofuel treasure troves and a potential boon for the rural economy.
We all know the world is melting, burning, and drowning. Well, is Washington, this green, environmentally-focused beacon whose governor made the environment his entire schtick for his failed presidential campaign, going to do anything about it? Are we really going to continue to be the last hold out on the last west coast LCFS holdout? Doesn't that make you roil in hot, sweaty liberal shame?
Fitzgibbon thinks this is the year we get with the program.
"I'm hopeful," he said. "I'm also stressed about it."