Oregon Senate passes low-carbon fuel bill

Source: By Hillary Borrud, East Oregonian • Posted: Wednesday, February 18, 2015

Despite attempts by Republicans to block the bill, Senate Democrats Tuesday passed a low-carbon fuel bill, moving it to the House of Representatives.

 SALEM — Democrats in the Oregon Senate passed low-carbon fuel legislation Tuesday, despite appeals by Republicans who sought to put the bill on hold indefinitely or refer it to voters.

It passed 17-13 on a nearly party line vote, with Sen. Betsy Johnson, D-Scappoose, the lone Democrat to vote “no.” Johnson also voted against the low-carbon fuel standard in 2013.

Republicans have tried for weeks to stop Senate Bill 324 by tying it to outgoing Gov. John Kitzhaber and his fiancée Cylvia Hayes, who was a paid consultant for groups that worked to organize support for the fuel standard.

Opponents had fresh ammunition on Tuesday: a federal subpoena that ordered the state to provide a long list of records related to Hayes’ consulting, including any that deal with the low-carbon fuel standard. The U.S. Department of Justice served the subpoena on the Department of Administrative Services Friday.

The Oregon Department of Justice and state ethics commission are also investigating Kitzhaber and Hayes’ dealings. Kitzhaber announced Friday he would resign, effective 10 a.m. Wednesday.

“Even if you agree with the policy, that should give you pause,” Sen. Tim Knopp, R-Bend, said of the subpoena Tuesday.

Senate Majority Leader Sen. Diane Rosenbaum dismissed the idea of any connection.

“There is no link between Cylvia Hayes’ contracts and the clean fuels program,” Rosenbaum said.

SB 324 is now in the House of Representatives, where it will be assigned to a committee. Republicans proposed several motions to sideline the bill, none of which succeeded despite three hours of maneuvering. One proposal would have referred the legislation to voters in a November special election, but Democrats voted down that idea.

Oregon already has a low-carbon fuels law that was passed in 2009, but it is set to sunset this year. SB 324 would make that fuel standard permanent. The Oregon Environmental Quality Commission voted in January to adopt regulations that will require fuel importers and producers to reduce the carbon content of transportation fuels by 10 percent over the next decade, starting in January 2016.

Fuel importers and producers have at least two options to meet the standard: blend more low-carbon ethanol and biodiesel into transportation fuels, or by purchase carbon credits. The Oregon Department of Environmental Quality plans to set up a system for entities such as electric vehicle charging stations to generate carbon credits.

The agency expects the fuel standard will reduce greenhouse gas emissions in Oregon by a total of 7.3 million tons over the next decade. When spread over 10 years, that decrease is relatively small.

In 2010, the latest year for which DEQ has data, vehicles in Oregon emitted 22.6 million tons of carbon dioxide. The average emissions decrease anticipated from the low-carbon fuels program would have translated to a 3 percent reduction in 2010.

Democrats including Sen. Michael Dembrow, D-Portland, said they continue to support the bill because it is an important step to fight climate change. Dembrow said when he voted for the original bill in 2009, his second grandchild had just been born and his grandchildren were also on his mind as he voted for SB 324 on Tuesday.

Not all Republican concerns related to Hayes and Kitzhaber. Sen. Alan Olsen, R-Canby, said he opposed the bill because he expects the fuel standard will be costly for rural and low-income Oregonians, and because he is skeptical about the link between carbon emissions and climate change.

An amendment added by the Senate Committee on Environment and Natural Resources would remove one of the cost control provisions adopted by the state’s Environmental Quality Commission earlier this year, and instead direct the commission to rein costs in part by issuing credits to entities that use alternative fuels.

The amendment was developed by Democratic lawmakers in consultation with Kitzhaber’s energy policy adviser and the DEQ, Sen. Chris Edwards, D-Eugene, wrote in an email. The legislation would leave intact two other cost control mechanisms in the existing fuels standards, which allow the state to make adjustments if there is an anticipated or unanticipated shortage of low-carbon fuels.

The EO Media Group/Pamplin Media Group Capital Bureau reported Jan. 27 that Hayes was paid a total of $118,000 in 2011 and 2012 through a fellowship with a Washington, D.C.-based nonprofit called the Clean Economy Development Center.

The group worked in 2014 to organize a coalition which includes businesses and other groups that support a permanent Oregon low-carbon fuel standard. The coalition, called Clean Fuels Work, has pursued a social media campaign in support of SB 324 and provided materials on the bill to lawmakers. Representatives of the petroleum industry are also lobbying lawmakers to vote against the bill.

It is unclear whether Hayes advocated for the Oregon low-carbon fuel policy, and Hayes has not provided details on her work for the Clean Economy Development Center.