A Possible Antidote to the Fossil Fuel Economy

Tim OConnor Nov 2014Much has been written about the causes of the recent downturn in world oil prices. So it shouldn’t be much of a surprise to hear that many places which derive a significant share of their economic activity from oil production have begun to feel the effects of this downturn.

As less money is taken from the sale of each barrel of oil produced, both major and local economies alike – from Alberta, to Texas, the Middle East, and Kern County – have seen a rapid decline in their tax base and overall economic output. In some cases, the drop in oil money has been so rapid and significant that some jurisdictions have declared fiscal emergencies.

Whether from layoffs at oil and gas operators, or government program cuts due to reduced tax collection, the downturn associated with reduced oil and gas profits shows just how fragile, and damaging, the fossil fuel-based economy can be. Just as families are hit in the pocketbook when prices at the pump shoot up, so too are many family livelihoods hurt when prices plummet. With this lose-lose proposition, we need to know now: are other options available?

Thankfully, there is another way. A new report released today from the fuels and energy consulting firm Promotum, (commissioned by Environmental Defense Fund, Natural Resources Defense Council, and Union of Concerned Scientists) shows that an abundance of locally-based, alternative fuels is on the horizon. According to Promotum, the state is on track to achieve significant fuel diversification by 2020 and cut carbon emissions associated with fuel production and use. This positive forecast also means we can expect prolonged domestic economic growth from emergent alternative fuel companies up and down the state.

Just last week, a report by the International Council on Clean Transportation (ICCT) showed that alternative low-carbon fuel volumes were becoming readily available throughout the western United States – lending further credence and support for Promotum’s work. At the same time, ICCT and Promotum show that policies like California’s Low Carbon Fuel Standard (LCFS) are a major reason for this fuel diversification movement – policies that support emergent industries and create sustainable jobs here in California.

Unfortunately, many in the fossil fuel community stress that the LCFS and other similar policies in California, Washington, and Oregon aren’t attainable. Promotum’s work turns those arguments on their head, showing that even under modest implementation scenarios, the policies are achievable and helpful for developing home-grown opportunities.

More states and jurisdictions are adopting similar policies to the ones California has – and as this spread continues, we’ll undoubtedly see greater market penetration of alternative fuels, more robust economic development, and fuel diversification. Ultimately, that will lead to a myriad of benefits for the environment, for the economy, and for the people.

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