Washington House Passes Clean-Fuels Legislation Sought by Inslee

OLYMPIA — Washington House Democrats approved clean-fuels legislation Tuesday night after overcoming fierce Republican opposition that was expressed in an hourslong floor debate.

House Bill 1110, which would lower the greenhouse gas emissions from transportation fuels, passed 53 to 43. After the vote, sponsor and state Rep. Joe Fitzgibbon, D-West Seattle, called it "the most important climate bill the House has ever passed."

Geared toward fighting climate change, clean-fuels standards already have been put in place elsewhere on the West Coast, generating intense criticism from the oil industry.

The legislation is one of the main parts of Gov. Jay Inslee's clean-energy agenda this year. Inslee is running for president with a focus on climate change.

The governor and lawmakers are also proposing to phase out fossil fuels in power production and hydrofluorocarbons, boost electric vehicles and increase energy conservation standards in buildings.

The clean-fuels bill could be the toughest lift for Inslee and Democrats. Some are concerned that the proposal could raise gas prices. Several industries -- from trucking to oil companies -- oppose it.

Environmentalists for years have sought to enact such policy in Olympia.

Vlad Gutman-Britten, Washington state director of Climate Solutions, called the clean-fuels proposal a "keystone policy" to reduce greenhouse gases and polluting emissions that contribute to respiratory diseases.

Foes of clean-fuel standards -- including the oil industry -- contend the policy will raise fuel prices, piling what amounts to a new tax on top of a gas tax that already is second-highest in the nation. They also argue that the policy won't ultimately be a cost-effective way to reduce emissions.

Much of Tuesday night's debate revolved around how the bill might impact Washington's rural areas. Republican lawmakers argued the proposal would cost jobs.

"This policy is so detrimental to my district, to my constituents," said Rep. Rep. Luanne Van Werven, R-Lynden, whose Whatcom County district is home to oil refineries.

But Rep. Mike Chapman, D-Port Angeles, argued the bill could help rural regions by allowing industries like pulp and paper mills to convert waste products into clean fuels.

"So I'll make no bones, this is a job-creator for my district," said Chapman, who voted in favor of the bill.

Clean-fuels legislation seeks to reduce the "carbon intensity" of fuels. That is defined as the amount of greenhouse emissions emitted through the full life cycle of a fuel's production -- or extraction -- as well as combustion. This calculation involves rating carbon emissions of hundreds of different fuels.

HB 1110 would require the state Department of Ecology to establish a clean-fuels program that, over time, would reduce consumption of traditional gasoline and diesel, as alternatives ranging from biogas to electricity come into greater use.

By 2028, the bill would restrict the carbon content in transportation fuels to 10 percent below their 2017 levels. By 2035, those fuels would have to be 20 percent beneath the 2017 levels. The proposal excludes fuels used by aircraft, locomotives and vessels, as well as electricity and exported fuel.

About 30.5 percent of Washington's greenhouse gas emissions in a recent three-year period came from "on-road" fuels like gasoline and diesel, according to Department of Ecology data.

The legislation could lead to a boom in Washington for the production of biofuels, which could be blended into gas and diesel to lower their carbon content, Fitzgibbon said.

The Western States Petroleum Association -- which represents oil producers and refiners, as well as related transportation and retail companies -- opposes the policy.

"We think it's regressive, unworkable and too costly, and we think there's better options," said Catherine Reheis-Boyd, president of the association.

Foes of the clean-fuels standard argue that in California, it could ultimately increase the cost of gas by more than 40 cents per gallon by 2030.

Gutman-Britten accused oil industry lobbyists of overstating the costs of the program and "prioritizing the health of their bottom line over public health in Washington and the health of the planet."

California, which began implementing a clean-fuels program in 2010, has the longest experience with the policy.

In 2018, when that state's rule required the carbon intensity of fuel be reduced by 5 percent, the cost of gasoline to consumers could have increased by up to 8.9 cents per gallon in some cases, according to the State Air Resources Board. The board is charged with protecting the public from air pollution and developing programs to fight climate change.

David Clegern, an information officer for the board, called those calculations "a reasonable upper bound of the costs to consumers," and noted that the actual impacts would likely be less.

British Columbia and Oregon also have low-carbon standards.

Assessing the greenhouse emissions released by fuels can be complicated. The evaluation of the carbon intensity of corn ethanol, for example, reflects not only fossil fuels that may be used to grow the crop, but also land use changes that trigger greenhouse gas emissions as fallow acreage is brought into row-crop cultivation.

The carbon intensity of other fuels, such as electricity, can vary greatly depending on whether that power is produced by coal or other energy sources that do not release greenhouse gases.

In California, the fuel standard and amendments approved last year by the state Air Resources Board call for a 20 percent reduction in the carbon intensity by 2030. The program establishes credits -- each one equal to a metric ton of carbon emissions -- that can be generated by producers of cleaner fuels, and can be sold to other fuel producers who need to reduce carbon intensity.

The state board has investigated compliance with the program's rules, and last April, the board announced fines of $785,000 against three companies.

Overall, officials at the state board said, the clean fuel standard has complemented a separate program that puts a cap on California carbon emissions that declines over time -- and allows companies to trade pollution credits.

But the Western States Petroleum Association has vigorously opposed California's clean fuels program. Association lobbyists have contended that it is an inefficient way to reduce greenhouse gases.

Their arguments found some support in a December 2018 review of California climate policies by the state's nonpartisan Legislative Analyst's office.

That study found "a broad consensus among economists" that a cap-and-trade policy was the most effective in reducing greenhouse gas emissions. The low carbon fuel standard program, however, "appears to be much more costly."

The Legislative Analyst's office suggested the California Legislature "might want to consider modifying or eliminating some of the more costly programs," and rely more heavily on the cap-and-trade program.

Inslee previously proposed a cap-and-trade program, but failed to get Washington lawmakers on board.

This year, Washington Sen. Reuven Carlyle, D-Seattle, has proposed a new cap-and-trade bill. Inslee, however, has said he is focused on his climate bills, because that's what he believes can pass the Legislature.

Reheis-Boyd, president of the Western State Petroleum Association, said her organization is more open to the idea of a carbon tax or possibly a cap-and-trade program, if it were well-designed.

The petroleum association in 2018 opposed the failed Initiative 1631, a carbon fee plan that proposed to raise money for government investments in clean energy.

But Reheis-Boyd called a carbon tax initiative that voters rejected in 2016 a "pretty good policy." That proposal was intended to be revenue neutral, raising taxes on fossil fuels while cutting other taxes.

"It's one we should revisit and look at," she said, adding that the association didn't support it at the time because of the differing views of its members.