Washington State is considering the implementation of a low-carbon fuel standard (LCFS). While some of the effects of such a policy on the construction industry are unknown because it has yet to be tried anywhere, the things that are known about the policy are not good.
The push for a low-carbon fuel standard is coming from two directions: The Governor’s Climate Legislative Executive Workgroup (CLEW) will soon be making its recommendations for greenhouse gas-fighting policies the state could adopt, and the LCFS is one getting serious consideration. Plus, Governor Inslee signed a pact with other western states and British Columbia that promises to enact greenhouse gas policies regionally, including a LCFS. Neither of these actions actually creates new policies; they are more suggestions of what the state could do regarding greenhouse gases. In any event, these are strong indications of upcoming legislative battles.
The draft CLEW report talks about implementing a LCFS of a 10% reduction in the carbon intensity of the fuel mix over a 10 year time period in the State of Washington. It doesn’t prescribe what the fuel mix will be; just that it should have lower carbon intensity.
Keep in mind that for years refineries have been making fuel with 10% ethanol for many markets. But, even a 10% ethanol mix reduces the fuel’s carbon intensity by only 1%. Adding even more ethanol (and it would take a lot more!) has been shown to dissolve seals and gaskets in engines. Fuels with something else – such as agricultural waste products – has never been developed in the mixes needed to reach the 10% carbon intensity reduction.
So without a real-world test, it’s hard to say what the affect would be of a not-yet-developed fuel mixture on construction equipment and vehicles. But as AGC’s Oregon-Columbia Chapter pointed out in battling a similar proposal in Oregon, converting to higher biofuel content fuels would affect truck engine warranties. Currently, there are percentage limits on blended fuels, which when exceeded will void many manufacturers’ warranties. It is very likely that construction equipment and vehicles would have to at least be retrofitted to accommodate blended fuels, as was the case for recent clean air rules and their impact on older diesel-powered equipment.
Other concerns raised about LCFS proposals include:
- Limited supply of biofuels in the US would likely trigger fuel shortages and spikes in fuel production costs, and industry analysts forecast that fuel costs could go up by as much as $1-$1.50 per gallon as a result.
- Retro-fitting equipment to handle these biofuel blends is incredibly expensive. The majority of contractors would be faced with making changes they cannot afford, while only some contractors are able to make the necessary investments in biofuels/energy production technologies, onsite fueling depots, total fleet conversions and all of the costs associated with these capabilities.
- California’s Low Carbon Fuel Standard Program was ruled unconstitutional in a United States District Court based on the Interstate Commerce Clause. The court battle continues.
- This kind of program is not feasible at the state level- these policies should be a matter of discussion at the Federal level. In fact, there are already federal mandates in place for advanced biofuels technology through the Federal Renewable Fuel Standards (RFS) program.