State of Play: LCFS in Vermont
In December, Vermont governor Jim Douglas joined several other states in signing a Memorandum of Understanding laying out a timetable for the future implementation of an LCFS. In committing Vermont to the agreement, Gov. Douglas declared his state “a leader in limiting greenhouse gas emissions,” and suggested the imposition of an LCFS would help both “meet our environmental challenges and encourage the creation of green jobs.”
Unfortunately, the only way an LCFS can “work” as engineered is by rendering secure, affordable sources of energy off limits – thereby having the effect of significantly expanding our nation’s dependence on foreign, LCFS-favored energy to meet its daily needs and costing thousands of jobs in the process. Ironically, studies show that an LCFS may actually contribute to an increase in the concentration of carbon dioxide in the atmosphere – bringing into question the governor’s notion of using an LCFS as a means to “meet our environmental challenges.”
Production and Distribution: How/Where Does Vermont Get Its Energy?
Vermont produces no petroleum of its own, refines none, and remarkably receives none via petroleum pipelines – rendering it completely dependent on others (and their trucks) for the energy resources necessary to fuel and heat the state.
While Vermont does receive occasional fuel imports from neighboring states, the vast majority of its refined petroleum comes directly from Canada – and nowhere else. Unfortunately, under the bizarre accounting methodology of the LCFS, secure and affordable energy resources from Canada could be denied entry into U.S. markets, creating serious doubt as to where the energy resources essential to Vermont residents would come from.
Every month, nearly 150,000 barrels of heating oil cross the border from Canada into Vermont – a number that shoots past 200,000 barrels a day during the winter months. As the graph below demonstrates, home heating oil isn’t the only refined product that Vermonters receive from their northern neighbors – they also rely on Canada for diesel fuel, propane, kerosene and even asphalt:
Source: Energy Information Administration, Company Level Imports, Dec. 2009
LCFS Impact on Vermont
Vermont, according to the federal Energy Information Administration, is “vulnerable to distillate fuel oil shortages and price spikes during the winter months” in particular – a function of the fact that more than 60 percent (three-fifths) of households in the state rely on fuel oil for space heating.
Regrettably, under a system envisioned by supporters of the LCFS, home heating oil – especially supplies from Canada, from where all Vermont heating oil originates – will be rendered more expensive to purchase and more difficult to access. In Vermont’s case, it’s not entirely clear where substitute supplies could even possibly come from, given the lack of ports and pipeline infrastructure.
In 2009, Vermont secured over $36.2 million from the federal Low-Income Home Energy Assistance Program (LIHEAP) to help subsidize the purchase of these fuel resources for those in need – nearly 30 percent of that sum in the form of an emergency “contingency” payment above and beyond the original budget request. Unfortunately, under the LCFS, a large portion of this fuel oil may be targeted for elimination, adding additional strain to an already over-extended LIHEAP budget.
