Oregon DOJ says low-carbon fuel standards can proceed, in spite of lawsuit

Source: By Christian Gaston, The Oregonian • Posted: Thursday, October 24, 2013

Oregon’s Clean Fuels Program aims to diversify the state’s fuel mix and boost the production of cleaner, lower-carbon fuels such as ethanol, biodiesel and biogas, which in turn could save consumers money and create thousands of new jobs related to clean-energy businesses. (Michal Thompson/Hillsboro Argus)

The battle over Oregon’s “low carbon fuel standards” got a bit of a lift this week, but the whole program could end up in court.

Supporters of the policy, which would push gas stations toward selling lower-carbon fuels, say it’s a key part of a statewide strategy to reduce carbon emissions.

The fuel standards are sitting in limbo now, but environmentalists hope a new legal opinion from the Oregon Department of Justice could help their cause.

“We really hope that Oregon moves forward with the program,” said Jana Gastellum, Oregon Environmental Council’s climate protection program director.

When lawmakers passed the standards in 2009, they included a Dec. 21, 2015 sunset.

It took long enough for the program to get up and running that state regulators at the Oregon Department of Environmental Quality realized setting up new industry standards that could disappear a year later didn’t make sense.

“DEQ is basically committed not to move forward with the second part of the program until the Legislature acts to remove that sunset,” said Cory-Anne Wind, the DEQ staffer in charge of the program.

Gov. John Kitzhaber tried to get the Oregon Legislature to lift the sunset earlier this year, but the effort failed in the Senate.

Opponents said a court case in California could result in Environmental Protection Agency regulations overriding state rules. That legal cloud hurt efforts to kill the sunset, supporters said.

So an opinion from the Oregon Department of Justice sent to lawmakers Monday saying the state can move forward is good news for environmentalists.

“As we have said all along, Oregon is not pre-empted from action on the (low carbon fuel standards). The governor remains committed to expanding an alternative fuel infrastructure that provides more consumer choice and reduces greenhouse gas emissions,” said Kitzhaber spokesman Tim Raphael.

The issue comes down to whether a recent ruling by the 9th U.S. Circuit Court of Appeals established that carbon fuel regulations in California and Oregon violated federal law, which pre-empts many state regulations. According to the DOJ, the state is in the clear.

Not so fast, says Paul Romain, who represents the Oregon Petroleum Association. His group’s lawyers disagree with the DOJ. If the Legislature removes the sunset, the whole program could wind up in court, which could take years to resolve.

“We’re in a phase of ‘my lawyer can beat up your lawyer,’ ” said Romain.

In the short-term, the action will likely be in the Legislature.

Romain said it’s unlikely that Democrats could remove the sunset in the upcoming short session in 2014 with few personnel changes expected.

“It’ll be an issue in 2015,” Romain said.

But Doug Moore, executive director of the Oregon League of Conservation Voters, said lawmakers need to act sooner.

“I think this is an issue that should be up every legislative session until it passes,” Moore said.