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SB 324 is about to cause your gas prices to skyrocket!

Oregon State Senator Doug Whitsett, Klamath Falls District 28

February Newsletter 2015

A public hearing on Senate Bill 324, the adoption of an Oregon low carbon fuel standard, was scheduled for the very first day of the 2015 Legislative Assembly. The timing of the hearing appears to signal that the majority party simply cannot wait to test its newfound supermajority voting muscle.

LCFS was first enacted by a Democrat supermajority in 2009 through the passage of HB 2186. That bill passed without a single Republican vote in either the House or Senate, and was also opposed by some Democrats in those chambers.

HB 2186 granted broad authority to the Oregon Department of Environmental Quality (DEQ) to regulate greenhouse gas emissions and evaluate similar programs being done by the federal Environmental Protection Agency and the states of California and Washington. It also defined the term “low carbon fuel standards” and allowed DEQ to adopt, by rule, standards for gasoline, diesel and fuels that could be used as substitutes for them. Those standards are also applied to greenhouse gas emissions that could be attributed to fuels throughout their lifecycle, including their production, storage and transportation.

The law required that its provisions expire, or sunset, at the end of 2015. No fewer than three bills, SB 488, HB 2237 and HB 2791, were introduced during the 2013 regular sessions to extend the sunset. All three failed to pass.

The alleged purpose of the low carbon fuel standard is to reduce the “carbon intensity” of fossil fuels. Once implemented, the standard would maximize the blending of so-called lower intensity alternative fuels into standard gasoline and diesel. Producers of ethanol, biodiesel and other biofuels will be given “carbon intensity credits” for their production of “renewable” energy products. Conventional suppliers of gasoline and diesel will be forced to purchase these “carbon intensity credits” to “mitigate” their carbon dioxide emissions.

One fact is abundantly clear regardless of stated intentions by supporters of the bill: Everyone that purchases gasoline and diesel fuel will ultimately be required to pay the increased costs resulting from the purchase of those credits.

DEQ estimates that applying the low carbon fuel standard’s artificial cost enhancements to fossil fuels will increase the price of gasoline by about 19 cents per gallon at the pump. However, consumer user groups are estimating the cost of compliance with the low carbon fuel standard to be much closer to $1 per gallon of fuel.

The hidden fuel tax would be rolled seamlessly into the price at the pump, because under the current provisions of the bill, no notification of the covert tax is required to be provided to consumers. Most Oregonians won’t even realize that they are paying an extra $2 to $20 to fill up their gas tanks.

In a recent article, the Oregonian editorial board stated:

“What has always been misguided policy, driven by misrepresentation from the governor’s office on down, now carries a depressingly familiar stink…the low-carbon-fuel standard is opaque and costly…it is a roundabout way of taxing gasoline and diesel fuels to subsidize alternative road fuels such as ethanol, biodiesel, and other biofuels.”

It is no surprise that the producers of these alternative fuels are among the strongest supporters of the low carbon fuel standard. They will also receive virtually all the direct financial benefit from the hidden fuel tax.

Governor Kitzhaber and his supporters continue to claim that the low carbon fuel standard will SAVE Oregonians up to $1.6 billion over the next ten years. The Oregonian editorial board also pointed out that the governor “conveniently failed to mention” that achieving such savings would require spending an equal $1.6 billion on alternative fuel powered vehicles. His selective use of data belies the fact that the same article that reports the potential $1.6 billion in savings also prominently states that the savings is dependent upon the expenditure of $1.6 billion for alternative fuel vehicles.

I have to categorically agree with the editorial board’s opinion that “opacity sold by half-truths is cause for alarm.”

At the end of the day, the low carbon fuel standard is not really about saving the planet. Oregonians comprise only about five ten thousandths (0.0005) of the global populace and only 1.3 percent of the population of the United States. Even the complete elimination of ALL Oregon greenhouse gas emissions would not result in a measurable difference in global emissions.

The low carbon fuel standard proposed under SB 324 is not about social justice, either. Families living at or near poverty levels spend the highest percentage of their income for energy. In fact, Oregon’s poorest families will suffer the greatest harm by forcing artificial and unaffordable increases in energy prices upon them.

The low carbon fuel standard represents little more than a political scheme to social-engineer huge subsidies for alternative fuel suppliers. Not surprisingly, many of those fuel suppliers provide enormous political contributions to compliant politicians.

The low carbon fuel standard is a political partisan issue. I do not expect a single Republican to vote to enact the standard. The only way it can be created is by a party-line Democrat majority vote.

Oregonians concerned about this misguided policy would be wise to contact their state representatives and senators and urge them to oppose SB 324. The outcome of this legislative session will depend largely upon participation from the public. That’s especially important, as an emergency clause currently attached to the bill would make it effective immediately upon passage and prevent citizens from being able to challenge and repeal the law through the referendum process.

People need to make their voices heard; otherwise, we may end up with laws like SB 324 that will ultimately undermine the prosperity and well-being of working people throughout the state.

Please remember--If we do not stand up for rural Oregon, no one will.

Best Regards,


Senate District 28

Email: Sen.DougWhitsett@state.or.us  I Phone: 503-986-1728 Address: 900 Court St NE, S-311, Salem, OR, 97301 Website: http://www.oregonlegislature.gov/whitsett

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