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Working Hard For You
MAY 18, 2015
THE OREGONIAN GOT IT RIGHT
At the beginning of this Session legislative leadership set up a workgroup to put together a transportation package for the state. I was a member of that group and we met for about two months and we were making some very good progress. I had told both the Speaker and President before the workgroup started I would support a package including a six cent gas tax increase over six years, but only if the low carbon fuel standards bill (LCFS) was taken off the table. I told them I could support the increase if it was going to roads, but not if we were going to do an additional gas tax going to things other than roads. When LCFS passed the workgroup ended, and we are now stuck in a situation we did not have to be in, except for the majority parties symbolic environmental agenda.
The Oregonian had an editorial on the subject last week that I thought really put the issue in proper perspective. As not everyone gets that paper I thought I would share it with you.
Gov. Kate Brown's 'clean fuels' albatross: Editorial Agenda 2015
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The low carbon fuel standard would raise fuel costs by up to 19 cents per gallon without spending a penny on roads. The money would subsidize alternative fuels for use in cars like this electric Tesla, above. (AP Photo/Al Behrman)
The Oregonian Editorial Board By The Oregonian Editorial Board The Oregonian Email the author | Follow on Twitter on May 14, 2015 at 3:16 PM, updated May 14, 2015 at 3:17 PM
In March, Gov. Kate Brown signed the 2015 Legislature's worst bill, SB324, a politically costly measure that resurrected an environmentally useless program. The governor has since been working to undo the inevitable consequences of that decision. She certainly deserves credit for trying. But to succeed, she'll need support from the very lawmakers who were steamrolled this year by the environmental left's "clean fuels" juggernaut.
SB324 breathed new life into Oregon's low-carbon fuel standard, which has the effect of a gas tax but won't raise a penny for roads. The program is intended to ratchet down the "carbon intensity" of road fuels over the next 10 years, a task that would be accomplished not only by blending low-carbon stuff into gas and diesel, but also by subsidizing the production of low-carbon "clean" fuels through the sale of credits. Buying the credits will be importers of high-carbon fuels – conventional gas and diesel – who will pass the costs along to consumers. The state expects the program to raise the price of fuel by up to 19 cents per gallon.
Even if it works as intended, the low-carbon fuel standard will have no meaningful environmental effects. Oregon accounted for less than seven-tenths of 1 percent of U.S. carbon emissions in 2012, the most recent year for which data are available. Energy-related carbon dioxide emissions in Oregon are even minuscule on a per-capita basis. Only four states and the District of Columbia were greener in this regard in 2011, according to the Energy Information Administration. Nineteen cents per gallon is a very, very high price to pay for an infinitesimal reduction in emissions that will do nothing whatsoever to affect climate change.
In plain English, the low-carbon fuel standard is a colossal policy stinker.
But the costs of SB324 don't stop there. By signing the bill over the objections of Republicans, who warned frequently of the program's cost-benefit delusions, Brown knowingly sacrificed support for a transportation funding package – a priority for both parties this session and for state businesses. Such a package likely would involve an increase in the gas tax, which effectively would be the second fuel tariff imposed during the same legislative session. Republicans have said they'll have no part of that.
"To spend the money that the people have available at the pump on a DEQ (Department of Environmental Quality) program that doesn't work and is really just a showpiece for the left wing to say that Oregon is doing something for climate change is foolish," says Rep. Mike McLane, R-Powell Butte, the House minority leader. And until the low-carbon fuel standard is repealed, McLane said Wednesday, his caucus isn't interested in considering a hike in the gas tax. Democrats need the support of at least one House Republican to raise the tax.
Despite their seemingly irreconcilable differences, the governor has begun meeting with legislative leaders, including McLane and Senate Minority Leader Ted Ferrioli, to discuss a transportation package, Ian Kullgren of The Oregonian/OregonLive reported this week. There doesn't appear to be much room for compromise, and everyone involved is very tight lipped about what's on the table. But who knows? Perhaps Democrats are willing to make a fuel-program concession significant enough to free up Republican votes for a transportation package.
Assuming the minority party is willing to wheel and deal, it should insist upon a couple of things: If Democrats want to subsidize low-carbon fuels, they should do so transparently and without using motor fuels as the vehicle. The low-carbon fuel standard is nothing more than a scheme for shifting money from those who buy gasoline and diesel fuel to those who produce low-carbon fuels. It's politically useful, if somewhat dishonest, because it allows policymakers to pretend they're not doing what they are, in effect, doing: levying a tax and using it to subsidize a favored industry. If policymakers want to pump public dollars into low-carbon fuels, they ought to do so explicitly – and prepare to explain to their constituents why the money is better spent on electric charging stations than, say, schools or state troopers.
It may be too much to expect supporters of the low-carbon fuel standard to accept such transparency, but not to fear. Opponents of the standard are preparing to file two initiatives for the November 2016 election, says Paul Romain, who lobbies for the petroleum industry. One of these, he said, would repeal the low-carbon fuel standard, allowing Oregonians to do next fall what Brown should have done this spring – say "no."
If this initiative qualifies for the ballot, and if voters support it (they should), the Legislature will have an opportunity to consider a transportation funding package in 2017.
Sincerely,
Senator Jeff Kruse
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