Kate Brown to lawmakers: a repeal of Oregon’s low-carbon fuels law is off limits in transportation talks

Source: By Hillary Borrud, The Oregonian • Posted: Tuesday, July 12, 2016

As a committee of Oregon lawmakers tours the state this summer in an effort to build support for a possible 2017 transportation-funding package, there’s one topic Gov. Kate Brown asked them to avoid: a repeal of the state’s low-carbon fuel law.

Brown made her expectation clear at a May 4 invitation-onaly meeting of lawmakers, lobbyists and business executives in Portland, where she said a repeal of the state’s low-carbon fuel law was off the table, according to drafts of her prepared remarks released by the governor’s office and people who attended the meeting.

Republicans in the Legislature had insisted during similar negotiations in 2015 on a repeal of the law — which they described as a second gas tax, because it could raise costs by up to 19 cents a gallon — in exchange for any transportation bill that raised the state’s gas tax.

Brown’s pronouncement hasn’t stopped Republicans from talking about a repeal or modification of the fuel standard before any wider transportation deal can be worked out. But the political calculus on the Republican side of the aisle to reach a deal could be shifting, regardless.

Rep. Cliff Bentz, a Republican from Ontario who has been deeply involved in transportation issues over the years, said he is not seeking a repeal of the fuel law, but he does want to discuss modifications such as an overall cap on the cost increase per gallon of gas. And Rep. Greg Smith, R-Heppner, said raising money for transportation is too important to condition it upon a repeal of the fuel standard. Smith’s district along the Columbia River is home to five ports.

“A transportation package is very important to district 57,” Smith said. “In the end, I’m going to vote for a bill based on its entirely, not one simple component.”

Smith’s willingness to support a transportation package without changes to the fuel law could be crucial to House Democrats’ ability to pass a transportation bill next year, because Democrats are one vote short of the three-fifths majority they need to pass a new tax. That could change by next year because every seat in the House is up for election in November.

House Republican Leader Mike McLane, of Powell Butte, said his caucus has not changed its stance since 2015.

“It comes down to if the state raises the cost of gasoline for consumers, where should that money go?” McLane said. “And we believe it should go to road and bridge improvements.”

The law requires fuel importers and producers to lower the carbon content of fuel, either by blending in more ethanol or biodiesel or purchasing carbon credits generated by facilities such as electric-car charging stations. The goal is to reduce Oregon’s carbon emissions from  transportation by 10 percent over a decade.

The Department of Environmental Quality administers the program — which took effect a year ago —  and has cited a study that estimated it could raise gas prices by 4 to 19 cents a gallon by 2025. However, the Oregon Environmental Commission voted last year to delay enforcement of the mandates until 2018 to allow more time to develop cost-containment strategies and other tweaks to the program.

Kristen Grainger, Brown’s communications director, repeated on Thursday what the governor has said in the past: Oregonians need both “clean air” and “serviceable roads and bridges.”

“Governor Brown doesn’t think Oregonians should have to choose,” Grainger wrote in an email. “We need both.”

In a statement, House Speaker Tina Kotek, D-Portland, suggested Republican leaders are insisting on modifications or a repeal of the fuel law because it is an election year.

“Right now, Oregonians are traveling on crumbling roads, unsafe bridges and congested highways every day, in every part of our state,” Kotek said. “We’re in the middle of campaign season now, but I’m hopeful that legislators will continue working together because next year, we have a chance to approve a plan that will make a real impact on Oregon’s economy and our quality of life.”

Bentz said in order to reach a deal, both Republicans and Democrats will need to show some flexibility on low-carbon fuels. “I would suggest both sides need to move,” Bentz said.