'California-Only' Diesel Will Come at High Cost for State

Study: Clean fuel directives will lead to job losses, drive price up to $6.69/gallon

SACRAMENTO, Calif. -- California clean fuel directives will lead to significant job losses for the state and drive up diesel prices at the pump to around $6.69 per gallon, according to a study just released by the California Trucking Association (CTA).

The study, "The Impact of the Low Carbon Fuel Standard & Cap-and-Trade Programs on California Retail Diesel Prices," prepared by Bethesda, Md.-based consultants Stonebridge Associates Inc., examined the effect of California's new low-carbon fuel and cap-and-trade emissions initiatives on the state's retail diesel future.

By 2020, the two programs combined could increase the price of diesel fuel by $2.22 per gallon, the report said. That would represent more than a 50% increase in the price of diesel and a shocking $6.69 per gallon at the pump. The average price difference between California and neighboring states would be $2.33 per gallon, when accounting for taxes.

According to the study, between 2015 and 2020, the higher costs of "California-only" diesel will cause the loss of nearly 617,000 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.

California's transportation and logistics industry is responsible for almost 14% of the state's economy and is an important source of employment in the state. The study said that a "California-only" diesel price caused will put California's transportation sector at a significant competitive disadvantage.

"CTA is supportive of the production and use of alternative fuels, but the cost gap between CARB's Low Carbon Fuel Standard and the diesel fuel that the other forty-nine states will continue to use is unacceptable," said Scott Blevins, president of Mountain Valley Express and 2012 CTA president. "This is a serious setback for any business dependent on diesel fuel for its operations.

"State regulators need to step down from their 'ivory tower' and understand the impact of these unfair policies on California truckers," Blevins added. CARB's "blind pursuit" of such policies will drive many California-based trucking companies out of state or out of business.

The report said such diesel price increases will cast an even wider net affecting food, fuel, clothing and other essential services transported by trucks.

Click here to download the full report.