Low-Carbon Transportation for Oregon John Galloway Program Director Oregon Environmental Council Presentation to JELL Symposium 10/10/08

Oregon Environmental Council Celebrating our 40 th anniversary this year We work to: oSlow global warming oProtect kids’ health from toxic pollution oClean up Oregon’s rivers oPromote healthy food and farms oBuild a sustainable economy

Fuels Policies: Current Renewable Fuels Standard oStatewide standard adopted 2007, currently in roll-out oE10 (10% ethanol) and B2 / B5 (biodiesel blends) oPortland just celebrated one-year anniversary of its RFS oFederal RFS: 36 billion gallons by 2022 Financial Incentives for Biofuels Feedstock and Fuel Producers oState: Feedstock incentives, BETC, property tax exemptions oFederal: loan guarantees, blender credits

Broader Fuel Policies: Future Low-Carbon Fuels Standard oReduce carbon in transportation fuels 10% by 2020 Including transportation fuels in Carbon Cap and Trade Most focus to date has instead been on advanced vehicle technology (e.g. plug-in hybrids, EVs, fuel cells)

Attempted Policy: Clean Cars Standard Also referred to informally as the “tailpipe emissions standard” (for GHGs) Would limit GHG emissions from cars Adopted by West Coast states + 12 other states + interest from 3 additional states; represent over 40% of new car market Challenged in courts by auto manufacturers on basis of federal preemption under Clean Air Act (EPA authority regulating GHGs) Auto makers make administrative claims that standard is too costly to meet

Attempted Policy: Clean Cars Standard Follow-on suit by California, joined by other 14 states that adopted the standard, based on undue harm in delay of waiver Dec ’07: EPA indicates intent to deny waiver, formally denied Feb ’08 CA + 16 states (including OR) file suit challenging merits of EPA decision Congressional inquiry finds EPA administrator, Stephen Johnson, ignored unilateral recommendations from his legal and technical staff to grant CA’s waiver

Low-Carbon Fuel Standard (LCFS) Reduce the average fuel carbon intensity of transportation fuels by 10 percent by year 2020 Spurs providers of transportation fuels to bring more climate-friendly fuels to market Adopted by CA in Executive Order and implemented as part of its Global Warming Solutions Act CA rules adopted this year, in effect 2009, phase-in period between 2010 and 2019 Adopted in British Columbia; Washington may consider in its upcoming legislative session OR likely to consider in Global Warming legislation

LCFS: Advantages Substantially reduce global warming pollution and create a sustainable and growing market for cleaner fuels Cleaner production and less air pollution Follow a different fuels path than petroleum industry is setting, which includes highly polluting domestic resources such as fuel from coal-to-liquids, tar sands and oil shale

Alternatives? (Alberta Tar Sands)

LCFS: Challenges Need for interim milestones to drive technological innovation and development of lower-cost solutions Accounting for land use changes: direct and indirect Modeling variety of fuel sources to accurately determine carbon intensity Concerns about regulatory certainty

Transportation Policies Overview 2009 legislation may consider funding upgrades to infrastructure, demand- side pilot programs, and climate change in planning process Transportation sector accounts for nearly 40% of Oregon’s GHG emissions Need to reduce vehicle-miles traveled

Transportation Policies Overview Revenue oGas tax revenues and vehicle fees dedicated by OR Constitution (Article IX, section 3a) to public highways, roads, and streets (with limited exceptions) oExample of new mechanisms: New car title fees, increasing gas tax and registration fees, increase lottery revenue portion by 7%, allocating federal Surface Transp. Program funds to transit, 0.1% increase in employer payroll tax

Transportation: Usage-based Fees PAYD: Pay As You Drive Insurance “Per mile” user fees oCould replace gas tax oODOT pilot program demonstrated system is inexpensive but not ready for commercial use oMay raise privacy concerns Congestion pricing Typically applied in high-traffic corridors and/or inner urban congestion zones Carrots vs. sticks: untapped incentives?

OEC’s Next Steps Secure a Low-Carbon Fuel Standard in Oregon and establish a “West Coast low- carbon fuels corridor” Promoting fuel cap & trade as part of Western Climate Initiative and Oregon policy Ensure Renewable Fuels Standard remains in place and achieves intended goals Ensure passage of environmentally sound transportation policies in 2009 session

Thank You! John Galloway Program Director (503) Ext. 117

Extra Slides

Diesel Gasoline ~57 billion ~110 billion ~2 million ~4 million ~720 million ~1.4 billion Gallons consumed in U.S. in 2002 Gallons consumed in Oregon each year Gallons consumed in Oregon each day Markets for Diesel and Gasoline Source: SeQuential Biofuels