Fact-checking the low-carbon fuel standard

Most of us don’t think twice about our options when we stop to fill our tank with gasoline. But what if you knew you had a choice of fuels, not just of brands?

We represent business groups working to bring choice to California’s fuel market by offering alternatives to gasoline and diesel, such as biofuels, natural gas, and electricity. Our products are cleaner in terms of both reducing climate change and public health impacts, and they reflect the way the world’s economy is turning toward cleaner energy. Also, we expect to see a decrease in Californian’s transportation fuel expenses over time by introducing real competition in the marketplace.

Our efforts are in line with California’s pioneering energy policies, including the Low Carbon Fuel Standard (LCFS), which requires fuel to be 10 percent lower in carbon intensity by 2020. The LCFS is a small step toward fair competition that puts a value on the cost of pollution and creates a strong market for cleaner fuels, greater consumer choice, and a more diverse transportation fuels market.

Not surprisingly, oil companies see the LCFS as a threat to their business model. The near total dependence on oil has proven to be a very profitable model for the oil industry. Some in the oil industry suggest that the LCFS is a threat to the rest of us and is harmful to California’s economy.

To fact-check the LCFS’ effects, we asked the respected consulting firm ICF International to look at what the LCFS will mean for big-picture trends like employment, gross state product, and personal income. ICF crunched the numbers and found any negative economic effects will be negligible in the short term—and that California’s economy will continue to grow. By spurring greater use of clean alternative fuels, the LCFS will save from $1.4 billion to $4.8 billion through avoided health costs and increased energy security.

Clean energy companies like ours represent an important slice of that economic growth. The ICF study calculates that the LCFS is already driving investments in clean alternative fuel production, infrastructure, and advanced vehicles. It could mean thousands of new jobs for our state.

And the LCFS is helping cement California’s leadership position in the clean energy sector. There’s big money at stake. According to Bloomberg New Energy Finance, global clean energy investment rose nine percent in the first quarter of this year compared to the first quarter of last year, hitting $47.7 billion.

The LCFS is already delivering cleaner fuels. It’s also providing a measure of insulation from gas price spikes. That’s in addition to curbing carbon pollution, making our air more breathable, and bolstering California’s leadership position in the clean energy sector.

The LCFS works for the innovative new businesses, and for the people and the economy of California. Think about that and your options next time you stop at a gas station.
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Ed’s Note:  Tim Carmichael is president of the California Natural Gas Vehicle Coalition. Eileen Tutt is executive director of the California Electric Transportation Coalition.