Governors' Biofuels Coalition

PORTLAND, Ore. (AP) – A federal judge on Thursday dismissed a lawsuit filed by oil companies challenging an Oregon carbon-reduction mandate.

U.S. District Judge Ann Aiken said Oregon’s low-carbon fuel standard does not violate federal law or the U.S. Constitution.

The low-carbon fuel standard requires oil companies to reduce the carbon emissions associated with extracting, transporting and burning their fuels by 10 percent over a decade. In the early years, they can meet the requirements by blending biofuels like ethanol, but they’ll likely have to eventually purchase credits generated by clean-energy producers.

The program’s supporters say it will generate a guaranteed market to encourage investment in cleaner burning fuels.

“We need to accelerate solutions and this decision means Oregon can keep leading in transitioning from the fossil fuel economy,” said Kristen Sheeran, Oregon director for the advocacy group Climate Solutions.

Critics of the program say it will increase gas prices without producing any meaningful reduction in global greenhouse gas emissions. The Oregon Department of Environmental Quality estimates gas prices will rise between 4 and 19 cents per gallon in the program’s 10th year. Oil companies have released higher estimates.

American Fuel & Petrochemical Manufacturers, the organization that filed the lawsuit in March, could not immediately be reached for comment after business hours Thursday.

The group argued that the Oregon law discriminates against out-of-state fuels and illegally regulated activity outside of Oregon. It also argued that federal laws pre-empted the state’s authority to regulate greenhouse gas emissions.

A separate lawsuit in state court is still pending, and critics of the program are likely to ask voters to repeal it.

Oregon’s low-carbon fuel standard is similar to programs in California and British Columbia. Washington Gov. Jay Inslee has also urged lawmakers to adopt the policy.

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