Source : Procurement Leaders
Moves by the California Air Resources Board to reduce greenhouse gas emissions have "significantly" increased the price of diesel fuel in California, it has been claimed.
The board requires that global commodity diesel fuel be included in the single state fuel regulation. This Low Carbon Fuel Standard (LCFS) regulation, one that includes diesel fuel for trucks and trains involved in international trade, was branded as an "attack on the jobs of blue-collar Californians" by the International Warehouse Logistics Association (IWLA).
The trade association said that CARB’s action drastically raises the price of diesel at the retail pump with very little environmental benefit.
IWLA claimed that its concerns have now been confirmed by an independent economic study: The Impact of the Low Carbon Fuel Standard and Cap and Trade Programs on California Retail Diesel Prices by Stonebridge Associates for the California Trucking Association.
According to IWLA, the study reveals that CARB will raise "California-only" diesel fuel wholesale prices by an additional $2.22 per gallon. This translates to a retail diesel price increase of 50%: $6.69 per gallon of diesel by 2020 – a price that only California companies would bear.
Joel D. Anderson, IWLA president & CEO, said: "This unnecessary and extremely costly fuel formulation directly threatens the livelihood of third-party logistics providers – the warehouses and companies that are our members – whose distribution centres receive goods from the ports of Los Angeles, Long Beach and Oakland. In essence, CARB’s message to shippers in the Pacific Rim is to bypass California ports and change course to Seattle and Canada – or plan to use the Panama Canal when it widens in 2014."
He added that, when diesel fuel was first added to the states’ Low Carbon Fuel Standard, IWLA expressed grave concerns.
Mike Williams, IWLA’s California governmental affairs representative, testified December 16, 2011, before the board. "I am here today to ask that you suspend the diesel requirement of the Low Carbon Fuel Standard," he said.
"IWLA requests that diesel be removed from the LCFS until such time that a fuel recipe could be tested and an economic analysis completed. It looks like we are half way there. We have the cost. It is too expensive. Testing the fuel is futile as companies will leave the state in droves."