Industry group drops low-carbon fuel fight

Source: By Hillary Borrud, Portland Tribune • Posted: Tuesday, April 5, 2016

SALEM — An oil industry group announced Thursday it will abandon a bid to get voters to weaken or repeal Oregon’s low-carbon fuel standard.

The Oregon Fuels Association had filed three initiatives targeting the law for the November ballot, but the group’s Executive Director Paul Romain said it would have been difficult to succeed with that strategy.

“The problem with any initiative is you’re asking people to … vote yes, to vote no,” Romain said March 31. “It’s a very confusing message.” The Oregon Fuels Association represents gas stations and other fuel distributors.

Instead, Romain said the fuel industry will push lawmakers to make a 2017 transportation funding plan contingent upon changes or a repeal of the fuel standard. That’s what Republicans did in 2015, and they could do so again next year because the Legislature can only raise the state gas tax with a three-fifths supermajority.

“We just felt the stronger position we had was saying, ‘OK, you want money for a transportation package, then work with us,’” Romain said.

A repeal of the low-carbon fuel standard was part of a transportation funding plan negotiated in 2015 by Gov. Kate Brown and a bi-partisan group of state lawmakers. That deal died, however, after the Oregon Department of Transportation revealed the plan would not achieve the promised reductions in greenhouse gas emissions, which was a sticking point for environmentalists.

The fuel standard is supposed to reduce carbon emissions from transportation by 10 percent over a decade through a combination of cleaner biofuels blended into gas and diesel and a carbon credit exchange to reward owners of electric charging stations and other alternative fuel infrastructure. Lawmakers passed a bill in 2015 to make the system permanent, and it took effect in January.

Even before the law, Oregon already required a 10 percent ethanol blend in gasoline and a 5 percent biodiesel blend in diesel.

“So far dozens of businesses, from a truck stop in Eugene to folks making fuel from landfill fumes, have signed up to generate credits from the sale of clean, renewable fuels,” Jessica Moskovitz, communications director for the Oregon Environmental Council, wrote in an email Thursday. “Oregonians don’t need to choose between clean air and good roads, we need both.”

Program isn’t working 

Even without the ballot initiatives, the low-carbon fuel standard faces significant challenges. Although the standard took effect in January, the Oregon Environmental Commission voted in December to delay enforcement of the law until 2018. Commissioners said they wanted frequent updates on the supply and cost of alternative fuels and carbon credits.

The Department of Environmental Quality, which administers the program, also changed one of its carbon emissions measurements last year to a value favored by the corn ethanol industry. The industry had threatened to join oil companies in attacking the law, if the state did not abandon a calculation that attributed a greater carbon impact to corn ethanol.

Romain said the Department of Environmental Quality is once again changing aspects of the fuel standard, after the petroleum industry notified the agency some of the numbers were incorrect. Agency staff could not be reached for comment Thursday afternoon, March 31.

“The bottom line, the program isn’t working,” Romain said. “And you know, it may collapse of its own weight.”

Moskovitz dismissed the idea that the program might be in trouble. “The program is working as it should by being updated as needed,” Moskovitz wrote.

Meanwhile, the state is offering millions of dollars in incentives to governments and businesses that install fueling infrastructure or purchase fleets of vehicles that run on compressed natural gas, propane or other “alternative” fuels. Thursday was the deadline for businesses and governments to apply for $3 million in state tax credits for alternative vehicle fleets, and the Department of Energy is also offering $8 million in tax credits for charging stations, fuel compression and storage facilities and other transportation projects through Sept. 30, according to agency press releases.