Low-Carbon Low-Carbon Transportation for Transportation for

OregonOregon

John GallowayJohn GallowayProgram DirectorProgram Director

Oregon Environmental CouncilOregon Environmental CouncilPresentation to JELL Symposium 10/10/08

Oregon Environmental Oregon Environmental CouncilCouncil• Celebrating our 40th

anniversary this year• We work to:

o Slow global warmingo Protect kids’ health from toxic

pollutiono Clean up Oregon’s riverso Promote healthy food and farmso Build a sustainable economy

Fuels Policies: CurrentFuels Policies: Current

• Renewable Fuels Standardo Statewide standard adopted 2007,

currently in roll-outo E10 (10% ethanol) and B2 / B5 (biodiesel

blends)o Portland just celebrated one-year

anniversary of its RFSo Federal RFS: 36 billion gallons by 2022

• Financial Incentives for Biofuels Feedstock and Fuel Producerso State: Feedstock incentives, BETC,

property tax exemptionso Federal: loan guarantees, blender credits

Broader Fuel Policies: Broader Fuel Policies: FutureFuture

• Low-Carbon Fuels Standardo Reduce 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 Attempted Policy: Clean Cars StandardCars 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 Attempted Policy: Clean Cars StandardCars 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 StandardLow-Carbon Fuel Standard(LCFS)(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: AdvantagesLCFS: 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 Alternatives? (Alberta Tar Sands)Sands)

LCFS: ChallengesLCFS: 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 Transportation Policies OverviewOverview

• 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 Transportation Policies OverviewOverview

• Revenueo Gas tax revenues and vehicle fees

dedicated by OR Constitution (Article IX, section 3a) to public highways, roads, and streets (with limited exceptions)

o Example 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:Transportation:Usage-based FeesUsage-based Fees

• PAYD: Pay As You Drive Insurance• “Per mile” user fees

o Could replace gas taxo ODOT pilot program demonstrated system is

inexpensive but not ready for commercial use

o May 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 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 Thank You!You!

John GallowayProgram Director(503)222-1963 Ext.

117johng@oeconline.org

Extra Extra SlidesSlides

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 Markets for Diesel and GasolineGasoline

Source: SeQuential Biofuels