Study Warns of $7 A Gallon Diesel in California By 2020
State's Cap-and-Trade Plan, Low Carbon Fuel Requirements Concern Trucking Industry
A study commissioned by the California Trucking Association claims the combined effect of a proposed cap-and-trade carbon emissions program and a pending 2020 low-carbon fuel standard by the California Air Resources Board could potentially drive diesel fuel prices up to $6.69 a gallon.
The study, prepared by Stonebridge Associates of Bethesda, Maryland, said the cost disadvantage of diesel fuel in California compared to neighboring states such as Nevada and Arizona, could be as high as $2.33, resulting in long-haul truckers re-fueling across the border in those states, as well as putting California-based trucking fleets at a major cost disadvantage.
The study claims the increased fuel prices could result in as many as 617,000 lost jobs in the containerized import sector, $68.5 billion in lost state domestic product, $21.7 billion in lost income, and $5.3 billion in lost state and local taxes.
The study also warned of the ripple effect high fuel prices could have on food, fuel, clothing and other consumer goods transported by truck in the state.
"Part of the basis of the numbers in the study was from the California Energy Commission, another state agency that paints a vastly different picture than CARB does," Michael Shaw, Vice President of External Affairs for the California Trucking Association, said when contacted by phone by Truck Trend. "Simply mandating something does not make it happen. CARB lives in an unrealistic dream world where our trucks run on wishes and dreams that ignore reality. As an industry, we're very sensitive to fuel prices, and the impact we have on the environment and the road. Our members are investing billions of dollars in new equipment to reduce pollution. The challenge we face with CARB is they don't listen to the industry, and the economic impact regulations have."
In an emailed response, David Clegern, Public Information Officer for the California Air Resources Board, said, "Numerous peer-reviewed studies have shown that greater use of biofuels/alt fuels have led to lower fuel prices than otherwise would have been the case. The recently-released study claiming large diesel price increases relies on a single, heavily-redacted analysis that was never published, and had no review whatsoever."
Source: California Trucking Association