Big Oil Tries To Slam Door On Cleaner Fuels In Oregon


Photo Credit: Associated Press

The nascent Clean Fuels Program in Oregon, which once underway would cut the greenhouse gas emissions from Oregon’s transportation fuels by 10 percent over 10 years, is meeting with staunch pushback from the fossil fuel industry. Joined by other heavy fuel-users organized under the Oregonians for Sound Fuel Policy coalition, the opposition is fighting against measures designed to reduce the carbon content of the state’s fuel.

Transportation accounts for nearly 40 percent of Oregon’s greenhouse gas emissions. In 2012, Oregonians spent more than $7.7 billion importing gas and diesel. The economic and environmental cost of this will continue to grow as conventional oil and gas sources deplete and more expensive and dirty sources like oil sands are brought online to replace them. According to the Oregon Environmental Council, the Clean Fuels Program could create thousands of in-state jobs and save over a billion dollars in fuel costs.

This idea does not sit well with the fossil fuel industry reaping the benefits of the status quo, and according to the Oregonian, the oil industry has more than doubled its lobbying expenditures over the last four years fighting this new law. The Oregonian found that the Western States Petroleum Association (WSPA) spent nearly $355,000 on lobbying expenditures in the first three quarters of 2013, the second-largest sum in the state and more than double what the association spent in all of 2009.

The WSPA is based in Sacramento, California and represents petroleum companies like BP, Chevron, ExxonMobil, and ConocoPhillips in Arizona, California, Hawaii, Nevada, Oregon and Washington.

First approved by the Legislature in 2009, the Oregon Clean Fuels Program has remained in limbo in part due to an impending 2015 sunset clause written into the legislation, meaning that the Legislature will have to renew the policy next year otherwise it will expire. This deadline, along with legal concerns and a drawn-out implementation process has slowed progress, and the state is yet to adopt the intended requirements for fuel producers. An effort led by Democratic Gov. John Kitzhaber attempted to remove the sunset clause in 2013, but the bill died in the Senate.

“The Department of Environmental Quality is basically committed not to move forward with the second part of the program until the Legislature acts to remove that sunset,” Cory-Anne Wind, the Department of Environmental Quality staffer in charge of the program, told the Oregonian.

The Union of Concerned Scientists supports removing the sunset clause, stating that “the Clean Fuels Program is a critical solution to cutting our oil use and is creating opportunities for economic growth in Oregon. After all, the state has no oil production or refining, but it does have a growing biofuels industry. Oregon should take this critical opportunity to give clean fuels the green light for years to come.”

Oregon’s legislative session, which lasts just over a month, started on Monday. State Sen. Michael Dembrow, D-Portland, and chairman of the Senate Environment and Natural Resources Committee, told the Oregonian that the “jury is still out” on whether legislation to continue the program will pass this session. Efforts are being made to simplify and streamline the program to make it easier for small businesses and other stakeholders to comply.

Oregon’s Clean Fuels Program is based on California’s Low Carbon Fuel Standard (LCFS), which caps the average carbon intensity of transportation fuels in California’s market and requires transportation-fuel sellers to reduce their fuels’ carbon intensity by ten percent by 2020. In September the Ninth Circuit of Appeals upheld California’s LCFS in a victory for the California Air Resources Board, and in January a federal appeals court refused to accept a petition to rehear a challenge to the LCFS.

Ann Carlson, faculty director of the Emmett Center on Climate Change and the Environment at the UCLA School of Law, wrote that “there’s no way to read the court’s opinion as anything other than a ringing endorsement for California’s attempt to capture all of the carbon emissions generated through producing, refining and transporting fuel:”

“The opinion itself praises the thoughtfulness and scientific basis of the state’s approach and argues that the “grave need” for state experimentation “in this context” helps bolster its conclusion of constitutionality. The court also makes clear that an approach that fails to take into account life cycle emissions would undermine California’s efforts to reduce greenhouse gases.”

Washington State is also considering a clean fuels program, but even before being officially proposed it is meeting with state Republican opposition amid claims that it will impose a “carbon fuel tax”. Republicans are decrying the potential standard as significantly raising gasoline prices. They are getting their information from two studies both funded in part by The Western States Petroleum Association.

In mid-January, Democratic Gov. Jay Inslee wrote a letter to several opposition Washington State senators rebutting their claims.

“I have discussed a low carbon fuel standard as a mechanism to develop cleaner fuels for our state. There is no element of a clean fuels standard that could in any way be called a “tax.” That you choose to call it a tax suggests that this effort is more about fear mongering or excuses for inaction than an actual discussion of the costs of reducing pollution from our transportation system.

Here are the facts: a clean fuels standard (or “low carbon fuel standard”) would require the fuel industry to reduce the overall carbon pollution in transportation fuels, gradually over time, through a variety of possible means including blending biofuels into gasoline or diesel, supplying cleaner gasoline or diesel, more use of natural gas or electricity to power motor vehicles, and other options. The standard would include cost containment measures to ensure that fuel prices are not significantly affected.”

West Coast states are also experimenting in other ways of mitigating greenhouse gases, and last fall leaders of California, Oregon, Washington and British Columbia signed the Pacific Coast Action Plan on Climate and Energy. While not binding the plan is intended to “spur finding new, smart ways for our governments, agencies and staff to work together,” by doing things like adding value and efficiency to climate initiatives through collaboration.