Oregon House sends low-carbon fuels bill to governor

Source: By JONATHAN J. COOPER, Associated Press • Posted: Thursday, March 5, 2015

Oregon Legislature

SALEM, ORE. — The Oregon House voted Wednesday to send Gov. Kate Brown a climate-change bill that’s likely to increase gas prices, handing the Democrat a thorny decision as she settles into office.

Brown has spoken favorably of extending Oregon’s low-carbon fuel standard, but she hasn’t specifically said whether she’ll sign the bill. The initiative aims to reduce carbon emissions associated with transportation fuels and spur investments in clean energy. But critics worry about higher gas prices.

Democrats approved the measure by the narrowest of margins, 31-29, after five hours of debate.

“For the health and prosperity of the next generation, we have a responsibility to act,” said Rep. Peter Buckley, D-Ashland. “The destructive impacts of climate change are not just in some far-off future.”

Four Democrats joined all 25 Republicans in opposition.

GOP lawmakers threatened to block a separate proposal to increase the gas tax to pay for transportation projects. Republicans last week pulled out of negotiations on the package, saying Oregonians can only absorb so much increase in the cost of gas.

“We are about to spend the money of Oregonians when they go to the gas pump, and not one dime for a road. Not one dime for a bridge,” Rep. Mike McLane of Powell Butte, the top Republican in the House, said before the vote.

The bill was a top priority for former Gov. John Kitzhaber, a Democrat who resigned last month following allegations that his fiancée, Cylvia Hayes, used his office to gain contracts for her clean-energy consulting business. Critics said the fuels bill should be sidelined until more is known about Hayes’ role, if any, in developing the policy.

After the vote, Republicans dialed up the pressure on Brown, telling reporters that a veto would be the only way for her to live up to her pledge to restore trust in government following the Kitzhaber scandal.

“Seldom has a governor had her words put to the test so quickly,” McLane told reporters.

Democratic lawmakers said they were not lobbied by Hayes on the measure, and their interest in the low-carbon fuel standard predates Kitzhaber’s administration.

The low-carbon fuel standard is intended to make alternative fuel technology more economically viable. California and British Columbia have approved similar legislation.

Oregon’s law was initially approved in 2009, but it was never implemented. It expires at the end of the year unless lawmakers take action.

The program requires fuel producers to measure the carbon emissions associated with products over their entire life cycle, including those from extracting, refining, transporting and burning them. Producers must reduce their life cycle emissions by 10 percent over 10 years.

To meet the target, they can blend biofuels or purchase credits generated by producers of cleaner-burning fuels. Because of the limitations of modern engines — and because biofuels have their own carbon emissions associated with growing them and converting them to ethanol — fuel producers can’t meet the entire standard by blending biofuels. They’ll likely have to purchase credits from alternative fuel companies.

Supporters say that creates a guaranteed market that encourages investments in alternative transportation fuels, such as propane, natural gas and electricity.

Critics say the cost of credits will drive up gas prices while having only a minuscule impact on global carbon emissions.

The Oregon Department of Environmental Quality has estimated gas prices would increase by four to 19 cents per gallon. Oil companies have released much higher estimates.

Read more at http://www.wral.com/oregon-house-sends-low-carbon-fuels-bill-to-governor/14491090/#ir5SP3iouqV19gBx.99