CALIFORNIA’S FUEL PRICES WILL INCREASE
An effort in the California legislature to postpone the inclusion of vehicle fuels in the Cap-and-Trade program was killed by Senate President Pro Tem Darryl Steinberg (D). Therefore, the program will go forward on January 1, 2015, as will our fuel prices.
Fuel refineries in the state (remember California has a unique blend of fuel that is only refined in California) will have to purchase carbon credits from the Cap-and-Trade market to offset their emissions. In turn, they will pass along this increased cost to the distributors, who will pass along to the retailers, who will pass along to the consumer.
It is estimated the initial increase will be $0.13-$0.18 per gallon. The cost in the short and long term will depend upon the cost of carbon credits.
IF YOU BOUGHT IT, A TRUCK BROUGHT IT
Here are some interesting truck facts for you.
If you connected all the loaded truck moves delivered last year, it would stretch to the moon and back more than 11 times!
While accounting for just over 14% of all miles traveled, trucks delivered 81% of all goods moved.
The trucking industry paid $37.8 billion in state and federal highway user fees. That’s 43% of all fees collected.
Trucking employs more than 7 million people around the country.
And, take a look at these pollution mitigation numbers. The trucking industry has spent billions of dollars upgrading fleets to cleaner more fuel efficient engines.
In case you can’t read those numbers, it’s an 88% drop in Sulfur Dioxide, 48% drop in NOx and 32% drop in Diesel Particulate Matter. Those reductions were achieved across all industry segments. Of course, we know the numbers for intermodal trucking in California are even better than that.
CAP-AND-TRADE AND FUEL PRICES AND YOU
Come January 1, 2015 expect fuel prices in California to rise by $0.15/ gallon, and therefore the price of everything else you consume will increase as well.
Why, you ask? Because that’s when California’s cap-and-trade regulations take effect. Fuel refiners will have to buy credits (i.e., pay a tax) to off-set their emissions. The total “tax” to be paid by the oil companies is expected to be $3.6B/year. They will, of course, increase their prices to the distributors, who will increase their prices to retailers, who will increase their prices to consumers.
Why doesn’t California source its fuel from other states, you ask? Because California has a special formula of fuel that is only required in this state. It is not cost effective for producers in other states to reconfigure their lines to refine our boutique brand of gas and diesel and then ship into the state.
How is the money collected via the cap-and-trade tax going to be spent, you ask? The state expects to collect $9B/year in taxes and have earmarked 20% of that amount to subsidize a high speed rail project.
CARB Considering Zero Emission Standards
With the largest threshold of requiring 2007 or newer trucks behind the drayage truck industry, we need to be looking ahead. The next deadline is January 2023 which currently requires the use of 2010 or newer trucks to service California’s ocean and rail terminals. However, there is a big push for the state to move towards zero emission heavy-duty trucks. Alternative fuels, hybrids and fuel cells are the technologies that rank at the top of the list. The challenge is not putting the cart before the horse. These technologies have to be developed and their success ensured before regulations for their use can be written and implemented.
Trucking Moves America Forward
We recently read an opinion piece in Transport Topics by trucking initiative Trucking Moves America Forward that deserves a verbatim recap:
“The public perception of professional truck drivers is not consistent with reality. Instead of hard-working, family men and women…, professional truck drivers can be seen as dangerous and an unwelcome highway hazard. The truth, however, is that today’s truck driver is a skilled professional who follows stringent safety guidelines and is experienced with the new and improved technologies that make trucks smarter, more fuel-efficient and safer than ever before.
“The trucking industry brings more than $642 billion in revenue into the country, thanks to the nearly 7 million people employed in trucking-related jobs – about 3.1 million of them as drivers. That’s equal to the populations of West Virginia and Maine combined.
“At a time when almost 10% of our country’s workforce is looking for employment, industry experts project the transportation industry will add 30,000 jobs this year alone.”
For the full commentary, click here.
Attack on the Owner Operator
After the Port of Los Angeles’ defeat in the US Supreme Court of their employee mandate and other restrictions and requirements of their Clean Truck Program, the Teamsters are waging a new war on the owner operator. They are claiming 65% of the drivers serving the nation’s ports and rail yards are misclassified. They firmly believe these drivers should be classified as employees rather than as owner operators and are filing claims with the Employment Development Department, Division of Labor Standards Enforcement and other governmental agencies.