State of Play: LCFS in Massachusetts
On July 28, 2008, Massachusetts governor Deval Patrick signed the Clean Energy Biofuels Act, directing the state to develop and implement a Low-Carbon Fuel Standard (LCFS). Working hand-in-glove with the Boston-based Northeast States for Coordinated Air Use Management (NESCAUM) office, Gov. Patrick convinced other governors to sign onto the Dec. 2009 NESCAUM-drafted memorandum of understanding (MOU), thus committing their states down a path whose terminus is the ultimate adoption statewide of an LCFS.
In signing that memorandum, Gov. Patrick characterized the LCFS as a policy initiative that would make Massachusetts “more energy independent and environmentally sustainable.” Unfortunately, for reasons described below, an LCFS is likely to have a disproportionately severe impact on the Bay State relative to other state signers of the MOU – without doing a thing to reduce the global concentration of carbon dioxide in the atmosphere.
Production and Distribution: How/Where Does Massachusetts Get Its Energy?
Massachusetts has no homegrown petroleum reserves, and doesn’t refine any petroleum either. The state is thus almost completely reliant on fuel imports originating outside the state and nation, which arrive in Boston Harbor via barge and tanker. Additionally, refined product is exchanged between Massachusetts and its neighbors through the use of two small-capacity pipelines, which link up ports in Connecticut and Rhode Island to Springfield.
According to data collected by the Energy Information Administration (EIA), the vast majority of the state’s gasoline, diesel fuel, kerosene (jet fuel) and home heating oil is imported from refineries in Canada and the U.S. Virgin Islands, with smaller percentages barged in from the United Kingdom and Portugal. Unfortunately, under the LCFS, refined energy supplies from both Canada and the Virgin Islands would be targeted for gradual elimination – since both sources use oil that scores poorly under the bizarre accounting methodology of the LCFS.
LCFS Impact on Massachusetts
Plainly put, no state in America is more heavily reliant on heating oil than Massachusetts. In the Bay State alone, more than 963,000 homes — almost half – use it to keep warm during the winter. All told, Massachusetts consumes 2 billion gallons of the stuff every year, accounting for almost 20 percent of the nation’s heating oil demand.
What does the state’s dependence on heating oil have to do with the imposition of an LCFS? According to a statement in the MOU initiated by Massachusetts and signed by 11 governors in December, home heating oil will receive no special regulatory treatment under an LCFS – that is, any effort to prevent LCFS-targeted gasoline and diesel from entering the state will also be extended to home heating oil, which tends to come from the exact same places.
As a result, Gov. Patrick’s support for an LCFS could lead to higher energy prices for those who can least afford them – especially middle- and working-class families and retirees living on fixed-incomes.
In 2009, Massachusetts secured more than $213 million from the federal Low-Income Home Energy Assistance Program (LIHEAP) to help subsidize the purchase of these home heating resources for those in need. Unfortunately, under the LCFS, a large portion of this fuel oil may be targeted for elimination, adding additionally strain to an already over-extended LIHEAP budget.
[...] maybe the two are a lot closer connected than meets the eye. Consider that in March alone, Massachusetts imported 2.8 million barrels of petroleum products from Canada, including fuels derived from [...]
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