The people of Washington spend roughly $14 billion each year on oil hauled in, by train, ship and pipeline, from out of state. That’s $14 billion that’s lost from higher purposes—such as creating new jobs in our local economy. Rather than handing over so much of our money to big oil companies, we could do a lot more good for Washington by investing in clean fuels right here at home.
Very little of our spending on oil actually stays in our regional economy, and our oil dependence makes us vulnerable to price volatility, plus a long ledger of health costs and environmental impacts. The clear path to create a homegrown economy supporting cleaner fuel choices in Washington is through a policy called a Clean Fuels Standard. A CFS would create a fair market for clean fuel alternatives and provide more consumer choices by reducing the carbon intensity of transportation fuels by ten percent over ten years. It would drive investment in local businesses and strengthen our local economy. All on top of clear benefits to our sky, water, health, and climate.
But don’t just take our word for it. On November 12, the Washington State Office of Financial Management released its final economic analysis of a CFS, the fruit of months of work with a group of technical consultants, transportation experts, and public interest and industry stakeholders.
The OFM report addresses the question: How might the Washington state economy respond to transitioning even just a portion of our transportation off fossil fuels? What if we gradually shifted our energy consumption away from petroleum, and ramped up our use of affordable clean fuel alternatives?
The answer is pretty darn good.
The full analysis considered four different scenarios with varying mixes of clean fuels and vehicles. One scenario looked at more electric vehicles, others looked at increases in sustainable biofuels of different types and volumes. In all scenarios, a diverse blend of clean fuels is used to replace petroleum. While not comprehensive, the scenarios do a decent job of sketching out possible futures. But no matter the scenario, each run of the numbers found economic benefits in every major indicator. Let’s turn through some of the headline numbers (all results represent an increase or decrease from the “business as usual” baseline):
- Gross State Product: –$30M to $140M (–0.01% to 0.05%)
- Personal Income: –$10M to $130M (–0.004% to 0.04%)
- Employment: –210 to 1,430 (–0.01% to 0.07%)
- Pollution: Decreases air pollutants and greenhouse gasses
The diversity of fuel choices spurred forward by the CFS is good for consumers and businesses, even if they have little to do with fuel clean fuel production. The economic sectors expected to see some of the greatest benefits from a CFS are construction, manufacturing, real estate and retail. The report authors note that the “gain…in retail trade and real estate speaks to the directional change of the buying power of consumers and businesses.” The jobs created by investments in clean fuels cannot be exported. They are long-term infrastructure investments that create family wage jobs putting steel in the ground creating the next generation of energy and sustainable growth.
The OFM analysis found terrific benefits without even fully exploring the health and environmental benefits of a CFS. Reducing petroleum dependence is one of the most important ways to improve our air quality and protect against climate risk. While the report took a stab at analyzing pollution reduction and found generally positive results, a more thorough analysis is being undertaken by the Puget Sound Clean Air Agency. In California, an analysis by ICF International found that the benefits of avoided greenhouse gas emissions, improvements in public health, and increased energy security add up to nearly $5 billion per year by 2020. Unlike many of the economic benefits, which accrue through fuel savings and future investments, the health benefits of clean fuels begin saving money and lives immediately, especially in some of our states most disadvantaged communities. A clean fuels standard means fewer trips to the hospital and a better quality of life for our children.
The results of the clean fuels analysis mirror those of numerous independent and peer-reviewed studies from California and Oregon. Not just the best research, but also the real life experience of California and British Columbia show us that clean fuels are good for jobs, good for the environment, and good for our future. The numbers are in, and confirm that a Clean Fuels Standard is good for Washington.