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Panel to hold hearing on Oregon clean fuels program

By Jonathan J. Cooper
The Associated Press

3/18/2013

SALEM, Ore. — Environmentalists are expected to face off with oil company officials at a legislative hearing today on continuing Oregon's clean fuels program.

Environmental groups want the Legislature to extend the Oregon Clean Fuels Program beyond its current expiration in 2015. The move would allow the state to go beyond a reporting requirement and begin forcing fuel providers to reduce the amount of greenhouse-gas emissions.

Oil companies and large-volume fuel users say the state is moving too fast and risks raising fuel costs significantly.

Oregon was one of the first states to approve a low-carbon fuel standard in 2009, allowing the Environmental Quality Commission to require that fuel producers reduce the carbon content of their fuel by 10 percent from their 2010 levels. The regulatory process hit snags, and with the Legislature's authorization for the program set to expire in 2015, the commission opted instead for a two-phase approach.

In December, the commission voted to force oil producers to report a carbon-intensity score that measures pollution associated with their fuel during its entire life cycle, including the electricity used to produce it and the fuel used to transport it to Oregon.

If the Legislature reauthorizes the clean-fuels program this year, the state would come up with a new set of rules to force fuel suppliers to begin reducing the amount of pollution.

Then, if the Legislature reauthorizes the clean-fuels program next year, the state would come up with a new set of rules to force fuel suppliers to begin reducing the amount of pollution.

Fuel companies could comply by blending in more renewable fuels or by substituting alternative fuels with lower carbon intensity. Companies producing low-carbon fuels would be able to sell pollution credits to higher-polluting fuel producers.

Proponents hope the requirements will spur new clean-fuel innovations and speed the adoption of alternative-fuel technologies.

Critics have a number of concerns, chief among them that gas and diesel prices would rise significantly — a claim proponents dispute.

They also say it would be impossible to meet the 10 percent reduction targets based on the fuels and technologies currently available. Under Oregon law, 10 percent of retail gasoline already must be ethanol, and 5 percent of diesel must be biodiesel.

Critics also say Oregon should wait for courts to sort out whether a similar law in California is unconstitutional. A federal judge ruled earlier this year that the California law illegally discriminates against out-of-state fuel producers. The case is now pending before the 9th U.S. Circuit Court of Appeals.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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