Governor’s signing of H.B. 2186 sets in motion a future in which the Low-Carbon Fuel Standard wreaks havoc on the Beaver State
It had nothing to do with a Klamath flood, a Cache Mountain forest fire, or even an historic solar eclipse that almost totally obscured the sun for six unnerving minutes that particular afternoon last summer. But nonetheless, on July 22, 2009, Oregon governor Ted Kulongoski declared a state of “emergency” anyway – signing into law legislation that used that exact term to defend the urgency of imposing a California-style Low-Carbon Fuel Standard (LCFS) on Oregon residents.
Of course, like politicians who have embarked down the LCFS path in other states, Oregon lawmakers had no idea what an LCFS should do, how it should work, or whom it should even affect. The solution? Pass a bill that orders the state Department of Environmental Quality (DEQ) to study the concept, hire a few consultants to draw up a draft, hold a couple of workshops to solicit advice from folks who know even less about an LCFS than DEQ, and then wrap it all together and deliver a workable plan for implementing the thing no later than December 2010.
But those were details to be worked out in the future. In the present, it was time for a string of press releases congratulating the state on following California’s lead in adopting an LCFS. Scarcely an hour after Gov. Kulongoski signed the bill, the first shot came from Gov. Schwarzenegger himself – saying Oregon had taken “an important step forward.” Then came an encomium from the Pew Center, followed by similarly effusive responses from environmentalists in Boston and Washington, D.C. How this policy might affect consumers who actually live in Oregon, the releases did not say. But even a cursory review of the unique circumstances governing the state’s fuel markets and distribution networks suggest the effect will be significant.
To understand why that is, first you need to understand what an LCFS is, and what it is not. Contrary to the description posted on the website of the Oregon Environmental Council, an LCFS will not, and cannot, “curtail carbon emissions from Oregon’s transportation fuels.” That’s because the amount of carbon emitted through the combustion of Oregon’s – or anyone else’s – fuel is constant; according to EPA, 19.4 pounds of carbon dioxide are emitted from the tailpipe for every gallon of fuel used, no matter from where those sources of gas or diesel may come.
So what does an LCFS actually seek to achieve, then — if not what its proponents believe it will? Simple, actually: It’s an attempt not to make the fuels in our tank any better, cleaner or more efficient than they are today – but rather, an attempt to make those fuels scarcer, more expensive and less reliable for the people who rely on them.
Let’s take a quick look at how Oregonians access their fuel, and from where these sources originally hail. This distilled description comes from federal government’s own Energy Information Administration (EIA):
Oregon’s only refinery … was shut down in December 2008. The State receives petroleum-based transportation and heating fuels from Washington State and northern California. Tanker trucks from California supply southern Oregon, while ships and barges deliver additional product from San Francisco to the Portland area.
So, to repeat: The fuels on which Oregon depends every day to keep the state at work and in motion are neither produced nor refined in the actual state; instead, they’re imported in from California and Washington, which in turn receive their shipments from places like Saudi Arabia, Alaska and Canada.
But so what? How does any of this apply to an LCFS in Oregon? Consider: Under an LCFS, oil feedstocks deemed by bureaucrats to be too “heavy” (generally assumed to have an API gravity below the low 30s) would necessarily be targeted for gradual elimination. As it turns out, that’s fine for Saudi Arabian crude (which averages between 33 -40 on the gravity scale), but what would it mean for lower-gravity oil from Canada, Alaska and even the mainland United States? It could mean that Oregon consumers will be denied access to some of the most secure and affordable energy resources in the hemisphere.
And not to put too fine a point on this, but even the state’s access to critical reserves of home heating fuel could end up being curtailed under an LCFS. Every month, more than 60,000 barrels of the stuff arrive via Canadian tanker in Portland Harbor. Now, it’s true: Most Oregonians don’t rely on heating oil to keep warm during the volatile winter season of the Pacific Northwest. But for the ones who do, an LCFS that explicitly targets Canadian energy will mean higher prices in the short-term, and gradually declining availability of supply thereafter.
But then again, under an LCFS, that’s precisely the point: Lower the amount of carbon in the atmosphere NOT by lowering the carbon content of transportation fuel, but by making it harder for everyday Oregonians to find, access and purchase it. And you know the real tragedy of it all? Most folks that have studied the LCFS (even one of the president’s top energy advisors) conclude that the policy won’t do a thing to reduce global greenhouse emissions. Heck, an LCFS may actually increase the concentration of carbon dioxide in the air, one respected group of researchers found last year.
To some folks, Oregon is known now and forever as the Beaver State. To others, the “Web-foot State” makes for a better fit. The famous journalist H.L. Mencken once referred to Oregon as the “Hard-case State,” for reasons clear apparently only to himself. In light of the potential for the eventual adoption of an LCFS, though, the question now seems: Will Oregon be known in the future as “California Copycat State”? For the sake of its residents, and certainly for its economy, one hopes that moniker never sticks.
