June 29, 2009

Dear friends and neighbors,

I believe it is important that we continue to seek clean, safe alternative energy sources to reduce our dependence on foreign and domestic oil. However, I also believe that development, production and demand should emanate from the private sector, not government.

Government often seems to get in the way of innovation. When it steps in front of the private sector with rules, regulations and mandates, the results can be costly and frustrating.

That's the case with biofuel mandates the Legislature approved in 2006. Rather than allowing the private sector to develop within its own time frame a sustainable market for ethanol and biodiesel as an option to regular fuel, state government tried to force a market to be created. The mandates require a minimum amount of ethanol and biodiesel to be added to gasoline and diesel. In addition, the 2006 law also requires state agencies to use a minimum of 20 percent of biodiesel in the state's carpool fleet.

Supporters of the mandates promoted the measure as helping agriculture and, specifically, Washington farmers who grow wheat, canola and other biofuel feedstock. While well intentioned, mandating a market to be created within unrealistic deadlines was shortsighted at best. Now we are beginning to see the unintended consequences of this law and similar biofuel mandates from other governments. These include:

• higher food prices which affect all Washington citizens;

• higher feedstock prices that hurt farmers who raise livestock;

• biofuels are still more expensive than regular fuel, even with government subsidies;

• biodiesel refiners are not profitable and many have closed operations;

• biofuels are known to be destructive to older engines and some marine engines;

• production of biofuels creates as much carbon as the fuels themselves save;

• Washington has not met its own biofuel mandate deadlines, yet the governor is determined to spend more time and money on this issue.

This week's article takes a look at the ramifications of government biofuel mandates.

As always, I welcome your comments. Please click here to contact my office through our e-mail service.

It is an honor to serve you.

Sincerely,

Dan Kristiansen
State Representative
39th Legislative District

P.S. - When e-mailing me, please do not hit reply to this e-mail as I will not receive the response. Instead, I invite you to click here and e-mail me. Thank you!

Consumers should dictate biofuel use, not government
By Rep. Dan Kristiansen

Recently, I was contacted by a Sedro-Woolley antique car collector frustrated about state mandates which require gasoline and diesel to contain ethanol and biodiesel. It turns out ethanol is not compatible with many older engines, nor with marine engines. Apparently that's the tip of the iceberg of problems now emerging with these mandates.

Senate Bill 6508 seemed like a good idea to the Legislature in 2006 because Washington is one of the largest wheat-producing states in the nation. Lawmakers thought expanded use of biofuels would create a new commodity market that would boost our state’s farm communities and provide new jobs. However, I had serious concerns about government leaping ahead of the private sector by forcing an artificial market, as well as effects mandates could have against consumers.

The bill required at least 2 percent of gas and diesel sold in Washington be ethanol or biodiesel beginning in December 2008, or when it was determined that the state's feedstock could satisfy that requirement. Mandates would be ramped up as more feedstock and seed-crushing capacity became available. The measure also required state agencies to use a minimum of 20 percent biodiesel in diesel-powered vehicles by June 1, 2009.

I support expansion of safe, clean alternative energy sources, including biofuel use, to reduce our dependence on foreign and domestic oil.  However, I also believe in a bottoms-up approach, in which consumer demand should determine the best timing for biofuel expansion as an option to regular fuel. I opposed SB 6508, as did many of my Republican colleagues, because it involved a government top-down approach that dictated unreasonable deadlines and requirements we knew Washington could not meet, even under the best of circumstances.

Three years after the hype that persuaded Washington to aggressively jump in with untested biofuel mandates, our concerns are playing out and reality is setting in.

Commodity prices have skyrocketed. Diesel has fallen. West Coast canola-based biodiesel is about $3.42 per gallon, before taxes. Conventional diesel is still under $2, before taxes. Even with federal subsidies, many biofuel refiners are closing, including a Hoquiam plant where 24 workers were recently laid off.

Worldwide biofuel mandates are affecting food and livestock feed prices, creating an economic burden for families. Although one segment of agriculture has benefitted, another is suffering higher prices. 

One study has determined biofuel production may even create more carbon than it saves, prompting the question, "Why bother?"

Finally, Washington did not meet the June 1 requirement for biodiesel to make up 20 percent of state agencies’ fuel use. Usage has barely surpassed 2 percent. The governor says she still wants the state to meet its usage requirement. She's willing to spend more time and money to not "lose the momentum." 

Rather than pouring millions of taxpayer dollars into an uncertain future, we should step back and re-examine government's role. The answer to alternative energy sources is not more government mandates. Government needs to step out of the way and let the private sector develop at its own pace, with supply and demand creating a sustainable market that doesn’t jeopardize food supply, ensures stability for growers and producers, and provides an additional option from which consumers can choose.

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EDITOR'S NOTE: State Rep. Dan Kristiansen, R-Snohomish, represents the 39th Legislative District, and also serves as chairman of the Washington House Republican Caucus. He can be contacted at (360) 786-7967 or from his Web site at: www.houserepublicans.wa.gov/Kristiansen.