Oregon bills aim to remove sunset date from Clean Fuels Program

By Erin Voegele | February 03, 2015

Efforts are underway in Oregon to repeal the Dec. 31 sunset date under the state’s Clean Fuels Program. Several bills pending in the Oregon legislature aim to remove the sunset date, allowing the program to be implemented past the end of this year.  

On Jan. 7, the Oregon Environmental Quality Commission voted 4 to 1 to approve rules for the second phase of the Oregon Clean Fuels Program. The program, which is similar to California’s Low Carbon Fuel Standard, requires a 10 percent reduction of greenhouse gases (GHGs) from transportation fuels over a 10-year period. The rules took effect Feb. 1. 

The process to establish the Oregon Clean Fuels Program has been ongoing for several years. The program was first approved by the state’s legislature in 2009. The Oregon Environmental Quality Commission adopted rules for the first phase of the program in December 2011.  Those rules allowed the department to collect information on fuels that were being imported into the state, enabling the creation of a baseline against which future reductions could be measured. The DEQ was directed to draft rules for Phase 2 of the program in February 2014, and an advisory committee met last year to provide input on program design. A comment period on the Phase 2 rules was also held last year. It closed Nov. 7.

Now that phase two of the program is being implemented, state lawmakers who support the initiative are working to remove the sunset date, ensuring the program will continue past the end of 2015. On Jan 12, a group of state senators introduced SB 324 in the Oregon Senate. On Jan. 20 the bill was referred to the Environment and Natural Resources Committee. A public hearing was held on Feb. 2 to address the bill. That hearing is scheduled to continue Feb. 4. Video of the hearing can be viewed on the Oregon State Legislature website.

In addition to repealing the sunset date for the Clean Fuels Program, the text of the legislation also indicates it would add provisions to the program that would prohibit the EQC from requiring compliance with the program if an analysis performed by a specific state office finds that projected incremental cost of compliance would exceed 4 percent of projected average annual cost of gasoline or diesel within the state.

Also on Jan. 12, HB 2192 was introduced in the Oregon House at the request of the House Interim Committee on Energy and the Environment. The bill was referred to the Energy and Environment Committee on Jan. 16. According to the text of the bill, the measure would repeal the sunset date from the law establishing the Clean Fuels Program and would declare an emergency, allowing the bill to take effect on its passage.

A separate bill, HB 2450, was also introduced on Jan. 12 and referred to the House Energy and Environment Committee on Jan. 16. That bill was introduced at the request of Gov. John Kitzhaber. It also aims to repeal the sunset date of the Clean Fuels Program and would declare an emergency, allowing the legislation to take effect immediately after it is passed.

On Feb. 2, the Kitzhaber’s office released a statement calling for the reauthorization of the Oregon Clean Fuels Program, citing its potential to create jobs, position the state as a leader in alternative fuel production, and save Oregonians more than $1 billion in fuel costs. According to the statement, the Clean Fuels Advisory Committee has released its final recommendations to the governor. Those recommendations call for the sunset date of the program to be lifted.

“We've only scratched the surface of the potential for alternative fuels to create a homegrown industry to tap into the billions we spend on gasoline every year,” Kitzhaber said. “We should keep more of those dollars in Oregon to grow, produce, and deliver fuels that benefit our communities with new good-paying jobs; benefit consumers with more choice and lower cost; and benefit our health and the health of our environment with less pollution.”

In addition to lifting the sunset date, the committee recommends a process is developed through rulemaking to cap the total cost of the program. The committee has also called on the state government to leverage Oregon’s partnerships with other jurisdictions on the West Coast to develop a regional market with consistent lifecycle methodologies. The recommendations also encourage collaboration between electric and natural gas utilities and third parties to generate and aggregate Clean Fuels credits, and calls for Oregon to ensure the program has a 10-year phase-in period from 2015 to 2025. Finally, the committee recommends the state advance integration of alternative fuels into statewide emergency response planning.

Additional information on the Oregon Clean Fuels Program and the committee recommendations is available on the Oregon Department of Environmental Quality website