Click here or the image above to watch Ranking Member Capito’s opening remarks from the committee hearing.

WASHINGTON, D.C. – Today, the Senate Environment and Public Works (EPW) Committee held a hearing titled, “The Future of Low-Carbon Transportation Fuels and Considerations for a National Clean Fuels Program.”

Below is the opening statement of Ranking Member Shelley Moore Capito (R-W.Va.).

“Thank you, Mr. Chairman, and thank the witnesses for being here today.  And I think we’ve got a great panel so we’ll get to learn a lot about this.

“For those unfamiliar with a Low-Carbon Fuel Standard, it is a regulatory scheme meant to advantage fuels that generate lower carbon emissions in their production and use over fuels that emit more.

“This may be achieved through financial incentives funded by taxpayers, decreasing quotas or limits on market access for more emissive fuels, or a combination of the two.

“I am very concerned by the concept of empowering bureaucrats to decide what fuel sources qualify, how, and what associated phase outs may look like.

“It sounds like a combination of the Social Cost of Carbon and centralized economic planning.

“We have watched administrations of both parties seesaw on the execution of regulatory programs that impact American energy prices with experience revealing that heavy-handed regulatory approaches inevitably lead to reduced supplies and higher prices.

“Perhaps nowhere has the tug of war been more obvious than the EPA’s Renewable Fuel Standard.

“Speaking of that program, in December EPA proposed the new RFS ‘Set’ rule to establish the required volumes of biofuels to be blended with conventional gasoline and diesel for the next three years, 2023, 2024, and 2025.

“As part of this proposal, EPA has allowed automakers contracting with certain renewable electricity producers to generate compliance credits, known as RINs, for the first time in this program.

“In fact, EPA says in their proposal that they are using the creation of electric RINs or eRINs, which have a cash value, to ‘incentivize increased vehicle electrification.’

“Yet another subsidy for EVs was not congressional intent nor is it a reasonable interpretation of the statute.

“This eRIN proposal has angered proponents of the RFS, critics of the program, and environmentalists alike, a rare trifecta.

“The fact that it is also formulated without any political accountability should cause us all significant concern.

“Speaking of things to be concerned about: one state that has taken a lot of action recently on transportation fuels is California.

“California was the first state to adopt the LCFS.

“It is no coincidence that California’s gas prices are more than $1.20 higher than the national average due to its regulatory policies and taxes. 

“A study from the Stillwater Associates found that the California LCFS by itself has added more than 22 cents per gallon in 202[0].

“Oregon and Washington have followed suit in establishing their own LCFS programs and have also seen their gas and diesel prices rise.

“Last September, fuel prices in Oregon spiked 50 cents per gallon, the sharpest spike of any state in the country.

“Washington’s cap-and-trade and LCFS programs went into effect at the start of the year, and according to state legislators and the Washington Independent Energy Distributors Association, gasoline has gone up by more than 34 cents per gallon and diesel by more than 43 cents on average, as a result of those two policies in the past month and a half.

“This stacked LCFS other environmental regulations, and taxes mean the residents of these West Coast states face the highest fuel prices in the lower 48.  

“But, don’t worry, if those prices may your eyes water, you can just buy an EV!

“California is requiring 100 percent of new vehicles purchased to be zero-emission by 2035 through its Advanced Clean Cars II rulemaking.

“That target means higher costs for consumers to buy still-scarce electric vehicles and hydrogen vehicles, and the potential disruption of interstate commerce.

“According to Kelley Blue Book, the average price of an electric vehicle in the United States as of August of 2022 was $66,000.

“That is more than the median household income in my state, which is $50,000.

“I don’t have anything against EVs, and we’ll eventually get there, but I think people should be free to buy the vehicles they want and can afford.

“It also does not help that California has some of the most expensive, and least reliable, electricity in the country, with even greater challenges ahead as nuclear and natural gas plants are forced to retire and the transportation sector is electrified.

“But those electricity prices can be a subject of a future hearing.

“Looking at the statistics on fuel and vehicle prices at a time of significant and sustained inflation, I doubt my state and many others, particularly in rural America, will want to import the West Coast’s policies, which will also bring higher prices for at-best hypothetical climate benefits.

“This is especially true at a time of sustained high inflation, which despite monetary policy and the ‘Inflation Reduction Act’ remains stubbornly predicted to be, and we saw the numbers yesterday, between 4 and 6 percent, well above the 2 percent target of the Federal Reserve, and is being forecast by groups like Apollo Global Management to be stuck there for the near- to medium-term.

“An LCFS and these other cap-and-trade regulatory schemes will only accelerate and lock-in those price increases at a time when American households and business can least afford it.

“I look forward to the testimony, and thank you again.”

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