Low Carbon Fuel Standard
6:32 pm
Wed July 2, 2014

Supreme Court Decision Could Impact Oregon Clean Fuel Rules

A biofuels pump dispenses 5 different blends of fuel at the 2010 Washington Auto Show
A biofuels pump dispenses 5 different blends of fuel at the 2010 Washington Auto Show
Credit Mariordo Mario Roberto Duran Ortiz via Wikimedia Commons

This week, the US Supreme Court declined to hear a challenge to California’s clean fuel law.

Supporters of the law – and of similar efforts in Oregon and Washington – say the high court’s decision clears the way for the West Coast to take the lead in reducing planet-warming greenhouse gas emissions. But opponents in the petroleum industry say the law is still a bad idea.

California’s Low Carbon Fuel Standard requires companies selling transportation fuels to reduce the fuels’ carbon impact by 10 percent by 2020. The so-called “carbon intensity” of fuels is calculated not only by how much carbon dioxide is released when the fuel is burned, but also by how much is emitted while extracting, refining and transporting it.

Energy industry groups claimed that by using this “well-to-wheel” analysis, California unconstitutionally discriminated against out-of-state firms and tried to regulate beyond its borders.  By deciding not to hear the appeal, the Supreme Court essentially affirmed a lower court ruling that the law is constitutional …

Richard Frank: “What that means is that the California Air Resources board is now free to go forward and implement and enforce that standard.”

Richard Frank is an environmental law professor at the University of California at Davis. And, he says that legal green light extends well beyond California.

Richard Frank: “The fact that the Supreme Court has denied review in these cases will give some additional encouragement to states who might have been reluctant to go forward while the legal challenge was still out there.”

In Washington, Governor Jay Inslee is considering a Low Carbon Fuel Standard. Oregon already passed a law similar to California’s in 2009. Now, Jana Gestellum, with the non-profit Oregon Environmental Council, wants to see it move forward.

Jana Gestellum: “The Supreme Court decision really affirms that this program is constitutional and removes an excuse for Oregon not to follow through on our program.”

So far, the state Department of Environmental Quality has required fuel companies in Oregon to report how much of what types of fuel they’re handling. But they haven’t had to start reducing the carbon intensity of those fuels. Margi Hoffman, an energy policy advisor to Governor John Kitzhaber, says it’s time to take the next step.

Margi Hoffmann: “Because of the recent court ruling, Oregon will proceed as we have been planning to proceed, including the lifecycle emissions calculation as part of our greenhouse gas emissions reduction program.”

The catch is that there isn’t enough time to put those rules in place before the law expires at the end of 2015. Lawmakers have twice declined to renew it. Now, the legislative session that starts next February is the last chance to keep the law alive. 

But industry opposition remains strong. Tupper Hull is with the Western States Petroleum Association. He says the Supreme Court decision doesn’t change the industry’s concerns about the whole approach of mandating fuel carbon reduction.

Tupper Hull: “You’re subjecting your marketplace to the potential for things like price spikes that could approach a dollar eighty per gallon extra.”

Hull says the technology doesn’t yet exist to achieve the carbon reductions required under the standard. And that could lead to shortages and higher prices. Hull also says the timelines laid out in the law are unrealistic.

Last fall, Governor Kitzhaber signed a climate agreement with California, Washington and British Columbia, Canada. One of the main greenhouse gas reduction tools Oregon brought to the table was its Low Carbon Fuel Standard.

Last February, Kitzhaber re-stated his determination to make it happen. Ultimately, that could boil down to whether he can persuade the legislature to extend the program past the end of next year.