A new state-hired study tentatively concludes that gasoline prices would increase by 2 cents per gallon by 2020 and by 12 cents per gallon by 2026 if low-carbon fuel standards are installed in Washington.
The Washington Office of Financial Management released a draft study Wednesday by consultant Life Cycle Associates, which also predicted the same increase in diesel prices if the state institutes standards mandating lower levels of carbon in fuels.
That draft conclusion is dramatically different from a Republican contention that low-carbon fuel standards would increase gasoline prices by roughly a $1 a gallon. Democrats and the GOP will likely fight over the figures if and when Gov. Jay Inslee introduces legislation to set up such fuel goals for the state.
The state report noted that 79 percent of the gasoline and 73 percent of the diesel fuel consumed in Washington in 2012 comes the state's five refineries. Consequently, low-carbon fuel standards will affect Washington's refineries.
Sen. Doug Ericksen, R-Ferndale and chairman of the Senate's Environment, Energy and Telecommunications Committee, had not seen the report when contacted late Wednesday afternoon. However, he criticized the OFM for producing the draft without public feedback and without holding public meetings.
Inslee spokeswoman Jaime Smith said the governor still has to read the draft. "We will be talking about this with legislators and stakeholders," she promised.
Smith emphasized the report is still in the draft stage, and that it will be a while before a final report is written. And Smith noted that the draft report is now publicly available on the OFM's Web site for anyone to read.
Todd Myers, an analyst for the conservative Washington Policy Center think tank, was suspicious that the report predicted low gasoline and diesel prices without an accompanying set of higher estimates. "Everyone is scratching their heads about how low the projections are," he said.
Myers also voiced concern that much of the report favors biofuels, noting that the state's biofuels industry has supported Inslee politically.
Fighting climate change — and carbon emissions behind it — has been a passion for Inslee, who plans to unveil a comprehensive legislative package in 2015 to deal with global warming-related issues. Vehicle fumes account for roughly 40 percent of Washington's carbon emissions.
Besides a low-carbon fuel standards proposal, Inslee will also likely propose either a cap-and-trade program or a carbon emissions tax, but not both simultaneously. In a cap-and-trade program, Washington would have an overall annual limit to its carbon dioxide emissions. Limits would be set for specific geographic areas. Firms would obtain rights for specific amounts of emissions in those areas and could trade their rights. A carbon tax is simply a levy on a firm's carbon dioxide emissions, which is supposed to inspire a business to decrease its emissions.