Oregon delays clean fuels enforcement until 2017

Source: By Ian K. Kullgren, Oregonian • Posted: Thursday, December 10, 2015

Environmental regulators voted Wednesday to delay enforcing Oregon’s controversial clean-fuels program until after voters decide next November whether to dismantle it.

A Department of Environmental Quality board voted unanimously to push the new standards to 2017, a year later than planned. The five-member board also approved a new system that some fuel-industry advocates say will make it harder to meet the standards.

The decision is the latest salvo in a pitched battle over the program, approved in the 2015 Legislature despite fervent objections by Republicans and some conservative Democrats.

“Climate change is a real problem, and we do need policies to address that,” board member Colleen Johnson said after the vote. “It’s a big program, it’s an important program, but it’s also important we get it right.”

In a statement, Chairwoman Jane O’Keefe said the board is “aware there is a high degree of skepticism in the public” about the program.

But if it works, she wrote, “it will be a win for the environment and all Oregonians.”

Opponents have likened the program to a gas tax — one that would particularly hit rural Oregonians — because it could raise gas prices as much as 19 cents a gallon by 2025. It aims to fight global warming by setting progressively tighter limits on the carbon “intensity” of vehicle fuel over 10 years. To comply, fuel distributors would have to blend in more ethanol, a biofuel derived from crops such as corn and sugar cane.

Fuel distributors would have been subject to the tighter limits next year. Now the standards are on hold until after voters decide on three ballot measures. Oil-industry advocates have until July to collect 88,000 signatures on the initiatives — two that would dismantle the program and one that would repeal it.

The board also voted Wednesday to change how the department measures carbon emissions. The new system takes into account higher demand for biofuels and indirect effects on climate change, such as forests destroyed to make room for farmland.

Those higher standards will make complying even tougher, despite the delay, said Frank Holmes, northwest regional manager for the Western States’ Petroleum Association.

“The program has been infeasible from the beginning, and with these changes, it makes it more infeasible,” he said.

The changes are less dramatic than the ones proposed in September, which drew howls of protest from producers of Midwestern corn ethanol — the most common biofuel made in the U.S. They said it would force distributors to buy blends made with cleaner Brazilian sugar cane.

The Renewable Fuels Association, which represents ethanol producers, was so angry it threatened to join oil companies in fighting the program.

In a phone interview Wednesday, association President Geoff Cooper described the new plan as a “compromise of sorts.” It still increases the carbon intensity of ethanol, but not as much as the original plan.

“It moves us out of the camp where we were opposing the program into a more supportive posture,” Cooper said.

Cory-Ann Wind, the planner overseeing the program, said, meanwhile, that the department will look at a policy in 2017 to blunt the program’s effect on gas prices.