DEQ Proposes Last Minute Clean Fuels Tweaks

by Taylor W. Anderson (The Bulletin) Environmental panel votes today on break for oil companies through 2018, new ethanol models -- Top environmental regulators are slated to finish rules today that include big changes for Oregon’s Clean Fuels program, three weeks before the nation’s second fuel-blending and carbon credit market program is set to launch.

After months of comments, the Department of Environmental Quality is proposing tweaks that some say will prevent potential cost increases brought when oil companies are forced to either use new biofuels to clean up gas and diesel or buy credits to offset pollution.

Supporters welcomed the program’s launch but called the delayed enforcement unnecessary.

“I think it’s completely unnecessary because it won’t matter — it’s like you’re negotiating with someone who isn’t interested in negotiating, who won’t give up ground,” said Michael Vevera, the Oregon adviser for the biofuel distribution company Whole Energy Fuels Corp.

“I think the vast majority will just do what they’re supposed to do,” Vevera added.

Oregon environmental officials today will finalize the carbon intensity standards fuels must be at or below for each of the next 10 years as the state standards for gas and diesel slowly drop by 10 percent.

Companies whose fuel is above the carbon standards produce carbon deficits and can be assessed penalties after the proposed delay period. Companies that produce fuel that is below the standard and used to “clean up” higher carbon fuel generate credits when they sell a certain number of gallons.

Richard Plevin is a research scientist at the University of California, Davis, who has been at the forefront of assessing indirect carbon emissions. He worked on the California low carbon fuel standard for years starting in 2007 before deciding that accounting for indirect carbon emissions is potentially so imprecise that he now opposes the low carbon fuel standard and supports other methods of cutting emissions he says are more definitive.

After pushback from the ethanol producers, the DEQ picked a newer model that would make it easier for corn ethanol to generate carbon credits through the program.

The commission today will consider instead assigning corn ethanol a carbon intensity value of around 70, and every 4,000 gallons sold would produce about nine carbon credits, according to DEQ data.

“I wouldn’t say that completely alleviates our concerns with the program, but it certainly moves us into a more supportive posture rather than being antagonistic or opposing the program,” said Geoff Cooper, senior vice president of the Renewable Fuels Association.

One credit in the Clean Fuels program represents 1 ton of carbon that’s not emitted. Credits have sold in California’s program, which is similar to Oregon’s, from anywhere between $22 and $105, according to the latest figures from the California Air Resources Board.

Wind, of the DEQ, said comments from biofuels producers influenced the agency’s decision to use an indirect carbon emission model that is more favorable for corn ethanol companies. But she said emerging science also played a part, and the state needs to pick a number to begin implementing the law.

“Whatever the commission adopts, it’s going to be proposed to be used for the next three years; then we evaluate what the next number will be,” Wind said. “It’s not like it’s cut in stone forever. We will continue to follow the science on what the number is.”

“Oil companies have spent an enormous amount of money to influence this law, and the lobbying continued in the rule-making process,” said Andrea Durbin, executive director of the Oregon Environmental Council, a strong supporter of the program. “They failed to win any substantive changes to this law.” READ MORE and MORE (Oregon Live) and MORE Bloomberg BNA) and MORE (National Resources Defense Council)

Excerpt from Oregon Live: Environmental regulators voted Wednesday to delay enforcing Oregon's controversial clean-fuels program until after voters decide next November whether to dismantle it.

Cory-Ann Wind, the planner overseeing the program, said, meanwhile, that the department will look at a policy in 2017 to blunt the program's effect on gas prices. READ MORE