Democrats eyeing a clean fuel standard
WASHINGTON — Senate Democrats are weighing whether to move ahead on a national clean fuel standard similar to those in place in states on the West Coast. It’s a move that could place additional costs on gasoline and diesel fuel.
The specifics have not been worked out, but low-carbon fuel standards such as those in place in California require producers of higher emitting fuels to buy credits from those producing low-emission biodiesel or hydrogen fuel produced with renewable energy.
At a hearing last month, Sen. Tom Carper, D-del., chairman of the Senate Environment and Public Works Committee, praised state clean fuel programs as an important tool in the fight against climate change.
“For some time now, our nation’s transportation sector has remained the largest source of greenhouse gas emissions in the U.S. economy,” he said.
“These state-level programs have successfully advanced the production and use of cleaner fuels and kept consumer and compliance costs low while fostering local investment and job creation.”
While discussions are in the early stages and face an uncertain political path in a divided Congress, a national clean fuel standard would likely increase motorists’ defection from traditional gasoline and diesel-powered vehicles, putting Texas’ oil refineries on increasingly shaky
ground.
The American Fuel and Petrochemical Manufacturers, a trade group representing refineries, has been critical of California’s low-carbon fuel standard, saying that along with the state’s cap-and-trade program, it added an additional 50 cents to the cost of a gallon of gasoline, helping drive the nation’s highest fuel prices.
A spokesman for the trade group said it would evaluate any fuel standard on a number of factors, including whether it is
“feasible and cost-effective” and “smart without unhelpfully inflating the cost of other liquid fuel products.”
The discussions come as Congress is already pumping billions of dollars into new clean transportation industries such as hydrogen fuel and electric vehicles in a bid to meet President Joe Biden’s goal of getting the country to net-zero greenhouse emissions by 2050.
For clean fuel producers such as Air Liquide, which operates its American operations out of
Houston, a national standard would likely expedite plans to convert trucks and other heavyduty transport to hydrogen fuel.
“The key is to build out the infrastructure and build out the need for the vehicles,” CEO Mike Graff of American Air Liquide Holdings told the Senate in mid-february hearings. “The Inflation Reduction Act clearly provides the capability to produce hydrogen under a variety of pathways. The key now is to go ahead and further incentivize the use of the vehicles.”
A clean fuel standard is likely to face considerable opposition from Republicans, with Sen. Shelley Capito, R-W.VA., calling the proposal a “combination of social cost of carbon and centralized economic planning.”
“Heavy-handed regulatory approaches inevitably lead to reduced supplies and higher prices,” she said.
Democrats would also need to navigate the demands of corn farmers in the Midwest, for whom ethanol fuel is a lucrative market.
Geoff Cooper, president of the trade group Renewable Fuels Association, said his organization supported the creation of a clean fuel standard, saying ethanol provided substantial emissions savings over gasoline.
But he also wants to see the Renewable Fuel Standard, the 2000s-era policy requiring that ethanol and other biofuels are blended in the nation’s fuel supply, maintained. Designed to wean the nation off Middle Eastern oil, many Republicans and Democrats argue that it has become obsolete since the shale boom made the United States the world’s largest oil producer.
At the hearing last month, Sen. Carper criticized the federal biofuels mandate for not including incentives for hydrogen and other clean fuels.
“The challenges with the Renewable Fuel Standard do not stop at hydrogen,” he said. “There are challenges across clean fuel stakeholders, including biofuels, which we can address by moving toward a more technology-neutral approach.”