Speaker 1: Some states are trying to make gasoline more climate change friendly,
Speaker 1: but they're facing some stiff opposition to that from environmentalists.
Speaker 1: What's going on here? Stay tuned to find out. Hello,
Speaker 1: and welcome back Wanting into Parts per Billion, the environmental
Speaker 1: podcast from Bloomberg Law. I'm your host, David Schultz. Maybe
Speaker 1: it's just me, but whenever I'm driving, I'm kind of always,
Speaker 1: maybe barely aware that at all times there are a
Speaker 1: lot of greenhouse gases coming out of my tailpipe. What
Speaker 1: if it weren't a lot, though, What if we could
Speaker 1: make it so that there weren't so many of those
Speaker 1: heat trapping emissions that are coming out of my car? Well,
Speaker 1: apparently we can. Gasoline with low or at least lower
Speaker 1: carbon intensity exists, and as of now, there are three
Speaker 1: states that incentivized fuel producers who make it. That's three
Speaker 1: out of fifty states. Surely there are other climate mighted
Speaker 1: states that want to get in on this, right Well,
Speaker 1: that's the topic of today's podcast, and to discuss this,
Speaker 1: we have on Bloomberg Law reporters Zach Bright. Zach wrote
Speaker 1: a story about why blue states are trying to pass
Speaker 1: new low carbon fuel standards and failing and I wanted
Speaker 1: to figure out what's going on here, But first I
Speaker 1: wanted to figure out exactly what low carbon fuel really is.
Speaker 1: So these standards that I covered are standards that certain places,
Speaker 1: states in particular, have put into place to lower carbon
Speaker 1: emissions from transportation vehicles. And basically what that means is
Speaker 1: that these states want fuel providers to require their fuels
Speaker 1: to have lower carbon outputs, and they do that by
Speaker 1: giving you know, fueld providers that do that credits. And
Speaker 1: that's what a low carbon fuel standard at the basic
Speaker 1: level is, you know, awarding fueld providers gas stations that
Speaker 1: offer lower carbon options to eventually you reach a certain
Speaker 1: lower limit. And it sounds like there are a lot
Speaker 1: of different ways to do that. I mean, we were
Speaker 1: talking before we started recording, but there's a national renewable
Speaker 1: fuel standard that requires gasoline providers to add a little
Speaker 1: bit of ethanol or maybe more than a little bit
Speaker 1: of ethanol into fuel. But I get the sense that
Speaker 1: on the state level it's a little bit different. Can
Speaker 1: you go into that. Yeah, So that's right. We have
Speaker 1: a national renewable fuel standard. I think it was put
Speaker 1: into place about a decade and a half ago. And
Speaker 1: that basically requires fuel providers to put a certain amount
Speaker 1: of ethanol, and that's a by volume standard. So the
Speaker 1: goal there as an oh, we want less carbon emissions,
Speaker 1: it's oh, we want our gasoline or diesel fuel to
Speaker 1: contain a certain amount of ethanol. The low carbon fuel
Speaker 1: standard is i would say, a bit newer in the
Speaker 1: sense that it's primarily targeting emissions for the sake of
Speaker 1: climate change. And right now we don't have a national
Speaker 1: standard that's a low carbon fuel standard. Some say, oh,
Speaker 1: we can make the renewable fuel standard into a low
Speaker 1: carbon fuel standard, or we could have a separate one.
Speaker 1: But right now three states have low carbon fuel standards.
Speaker 1: Two of them are active, one in Oregon, in California,
Speaker 1: and Washington was the third to kind of move forward
Speaker 1: their lower carbon fuel standard, which is set to take
Speaker 1: effect next year. That's a really important point. I want
Speaker 1: to sort of labor that a little bit that the
Speaker 1: National renewable Fuel standard that requires adding ethanol, which we
Speaker 1: should say is made from corn essentially to gas, was
Speaker 1: not made for environmental reasons necessarily. It was. It was
Speaker 1: created to reduce the demand on fossil fuels as a
Speaker 1: way to like stretch, you know, fossil fuels, and this
Speaker 1: was at a time when the price of fossil fuels
Speaker 1: actually as as it is now, was very very high.
Speaker 1: It sounds like that's not the that's not the point
Speaker 1: of what these states are doing. The low carbon standard.
Speaker 1: This actually has environmental goals here, right, So the renewable
Speaker 1: fuel standard had an environmental component, but I think it
Speaker 1: was just the ethanol requirement or the bio fuel requirement.
Speaker 1: But actually a low carbon fuel standard doesn't limit fuel
Speaker 1: options to ethanol. You know, it can be any type
Speaker 1: of fuel. If you can make a fuel with even
Speaker 1: another fossil fuel, so long as it meets this lower
Speaker 1: carbon output that achieves you know, what they want. So
Speaker 1: let's get to really the meat of your story here,
Speaker 1: which is that, as you mentioned, we have three states
Speaker 1: all on the Pacific coast, California, Oregon, and now Washington
Speaker 1: who have enacted these types of state level fuel standards.
Speaker 1: But there are also a lot of other states, specifically
Speaker 1: states that are controlled by Democrats, that try to do
Speaker 1: this as well and failed. What's going on here, wire?
Speaker 1: You know, for every state that enacts this, wire, so
Speaker 1: many more trying and failing. Yeah, that's a that's a
Speaker 1: great question. So Washington had some trouble enacting their own
Speaker 1: low carbon field standard. They were successful, but initially they
Speaker 1: wanted to link it to a gas tax. And I'd
Speaker 1: spoke to one expert and he told me that, you know,
Speaker 1: there's kind of three broad reasons why lowcrmon field standards
Speaker 1: kind of face these obstacles. The first one is that
Speaker 1: lawmakers and opponents are concerned that, you know, a low
Speaker 1: carbon field standard is going to add to gas prices.
Speaker 1: That's a fear that proponents of a low carmon Fiel
Speaker 1: standards say, you know, that's not really going to happen.
Speaker 1: But that's I mean, that has a lot of traction
Speaker 1: these days, you know, where like the you know, you
Speaker 1: see headlines about the price of gas like every day practically.
Speaker 1: That's definitely right. So there is that kind of perception
Speaker 1: problem in actuality. The studies that I found the Oregon
Speaker 1: Environmental Department, I think they had looked at their low
Speaker 1: carbon field standard. They found it added sent per gallon
Speaker 1: two gas. Not that much. Yeah, And then there was
Speaker 1: another studied and they found that in California their low
Speaker 1: carbon fuel standard added twenty two cents per gallon, so
Speaker 1: it's a little more yeah. Yeah, So you know, take
Speaker 1: those studies how you will. But you know, the advocates
Speaker 1: in Washington had said, you know, this isn't going to
Speaker 1: be a problem. It's really the global actions that affect
Speaker 1: gas prices. Right. The second reason that these low carbon
Speaker 1: field standards have kind of not gained traction in these
Speaker 1: other states is because there isn't really a lot of
Speaker 1: profit to be made from them. So in Washington, for example,
Speaker 1: there they passed a cap and trade program last year
Speaker 1: that's generating a lot of revenue, some of which is
Speaker 1: actually going to funding this low carbon fuel standard. But
Speaker 1: the low carbon fuel standard it self, it's self sustaining,
Speaker 1: but it doesn't give you any profit to do something
Speaker 1: else with. So it's a little part of a song.
Speaker 1: It's not generating revenue for someone. No one's no one's
Speaker 1: kind of getting rich off of this, right. And the
Speaker 1: third problem is that environmentalists are actually sometimes in position
Speaker 1: to low carbon field standards themselves. Yeah, and I want
Speaker 1: to get even more deep into that because that was
Speaker 1: something that I thought was so interesting in your stories,
Speaker 1: that it's not that you have in these blue states.
Speaker 1: You know, Republicans blocking these these new standards. Although you
Speaker 1: know Republicans are opposed, you also have environmentalists who were
Speaker 1: not really into it either, and that combination is what's
Speaker 1: stopping them from from becoming law. Explain the argument there.
Speaker 1: Why are environmentalists opposed to this? I mean, I face value,
Speaker 1: you'd hear lower carbon fuel and you'd think that's a
Speaker 1: no brainer for an environmentalist. No, that's exactly what I thought.
Speaker 1: You know when I first reported on this is you know,
Speaker 1: a low carbon fiel standards sounds like an environmental solution.
Speaker 1: But I spoke with and some environmentalists, some environmental advocates,
Speaker 1: and they said that a low carbon field standard is
Speaker 1: actually kind of a policy of the nineties where you know,
Speaker 1: it will lower carbon emissions over time, but the climate
Speaker 1: goals that we need to meet now, they say, are
Speaker 1: you know, a lot bigger, and we need to do
Speaker 1: something like move to zero emission vehicles. And what a
Speaker 1: low carbon fuel standard actually does is it provides fossil fuels,
Speaker 1: you know, with prolonged use. You know, we're still going
Speaker 1: to use gasoline and diesel, just maybe with lower carbon outputs.
Speaker 1: And so they're saying, we want a bigger jumps. That's
Speaker 1: so fascinating. And you know, I we see this happening
Speaker 1: a lot where you have environmental activists and specifically climate
Speaker 1: activists kind of debating about do we pursue this policy
Speaker 1: that lowers the carbon footprint of fossil fuels or do
Speaker 1: we try to pursue in eliminating fossil fuels altogether. And
Speaker 1: it's I don't think there's a good answer, I mean,
Speaker 1: and this is just another example of that where you
Speaker 1: could argue that they're letting the perfect be the enemy
Speaker 1: of the good. But on the other hand, you can
Speaker 1: kind of understand why they would. You know, a climate
Speaker 1: activist would want to eliminate fossil fuels full stop as
Speaker 1: soon as possible. Yeah, I would say this is a
Speaker 1: really interesting issue because sometimes it can fall on partisan
Speaker 1: lines where you can have Republicans, for example in New Mexico,
Speaker 1: and complete opposition, but then also Democrats. Some Democrats who
Speaker 1: might be skeptical of this market based approach might also
Speaker 1: oppose this, and so for that reason, you know, some
Speaker 1: environmentalists do want a low carbon fuel standard, and some
Speaker 1: fuel groups actually want it too, because they can sustain
Speaker 1: their business with lower carbon fuels that are still at
Speaker 1: the end of the day, gasoline and diesel fuels. But
Speaker 1: at the same time you also have environmentalists saying, you know,
Speaker 1: this isn't enough, we want more, and you have environmentalists
Speaker 1: and Minnesota, for example, there was a group of twenty
Speaker 1: two who wrote a letter saying that a low carbon
Speaker 1: fuel standard would impact the immediate environment by encouraging more
Speaker 1: agricultural production on you know, natural ecosystems. And so that's
Speaker 1: another issue that you know, this thing brings about, and
Speaker 1: that's to clarify, hear, more agricultural production, meaning growing more
Speaker 1: corn to make more ethanol. That's something that I think
Speaker 1: a lot of environmental activists have talked about that the
Speaker 1: renewable fuel standard creates other environmental impacts if you you know, uh,
Speaker 1: you know, take out grassland or forests and grow corn
Speaker 1: for it exactly. Yeah. Uh. And the other thing we
Speaker 1: should note is that, I mean, these are this is
Speaker 1: not a situation where these gas uh, these fuel standards
Speaker 1: are going down by a lot. This is really close.
Speaker 1: Specifically in New Mexico. I think your story wrote that
Speaker 1: the fuel standard lost by one vote in the House.
Speaker 1: That's literally one vote, right, So it was actually it
Speaker 1: was a tie vote or you had thirty three to
Speaker 1: thirty three and a House of seventy with four abstentions
Speaker 1: or at least non presence, and you had Democrats outnumbering
Speaker 1: Republicans by nearly two to one in that chamber. It's
Speaker 1: a blue state, right, So, and the governor was pushing
Speaker 1: for this. Governor Michelle Juhan Grisham was really you know,
Speaker 1: advocating for this as a central part of you know,
Speaker 1: their climate policy. And this was the second time they
Speaker 1: were going at it, and so, you know, this has
Speaker 1: been something that just you know, critics and you know,
Speaker 1: some experts have said, you know, it's kind of a
Speaker 1: flawed policy because it doesn't produce enough rewards and people
Speaker 1: just don't think it's enough. Okay, finally, where are we
Speaker 1: headed in the future. Do you see this as being
Speaker 1: kind of dead? I mean, you know, yes, we have
Speaker 1: three states, including a new one, you know, adopting this,
Speaker 1: but it sounds like we also have several other states
Speaker 1: you know, running into a wall here trying to get
Speaker 1: this past. Do you think this idea has kind of
Speaker 1: you know, it's not going to be expanding or do
Speaker 1: you think that that the proponents of this idea will
Speaker 1: try different tactics and keep trying. I think there's going
Speaker 1: to be continued action, and I think there's definitely arguments
Speaker 1: on both side where you could say, oh, look at
Speaker 1: what happened in Washington. They tried, they tried again, they
Speaker 1: got a low carbon fuel standard that's going to be
Speaker 1: something that over the next twenty years or so, it's
Speaker 1: going to lower transportation fuel emissions from auto vehicles by
Speaker 1: twenty percent. But on the other hand, you could say, well,
Speaker 1: look at New Mexico and look at New York. They
Speaker 1: had their state budget and they didn't incorporate a low
Speaker 1: carbon field standard that was you know, pushed by lawmakers
Speaker 1: and environmental advocates and other groups, but also opposed by
Speaker 1: lawmakers and environmental advocates and other groups where they say
Speaker 1: strange bedfellows exactly. Yeah. And in Minnesota, you know, they
Speaker 1: had a Climate and Energy Omnibus bill and they're still
Speaker 1: studying it, and so I think, you know, there's potential
Speaker 1: for that to move forward. But you know, if I
Speaker 1: had to bat on it, I would say, you know,
Speaker 1: it's more likely than not to fail. So to sum
Speaker 1: it up, not dead, but probably on life support, right, Yeah,
Speaker 1: you know it really it really depends on the state
Speaker 1: the situation and you know how people fall on it.
Speaker 1: All right, Well that was Zach Bright, environmental reporter with
Speaker 1: Bloomberg Law. Thank you so much for joining us. Yeah,
Speaker 1: thank you, David. And that's it for today's episode of
Speaker 1: Parts per Billion. If you want more environmental news, check
Speaker 1: us out on Twitter. We use a pretty easy to
Speaker 1: remember handle. It's at environment. Is that at environment? I'm
Speaker 1: a David B. Schultz. That's b as in runs batted in.
Speaker 1: Hopefully the Washington Nationals will find a few more of those.
Speaker 1: Today's episode of Parts for Billion was produced by myself,
Speaker 1: David Schultz. Partsfer Billion was created by Jessica Coombs and
Speaker 1: Rachel Dagle and is edited by Zach Sherwood and Chuck McCutcheon.
Speaker 1: Our executive producer is Josh Block. Thanks everyone for listening.
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