With Oregon Climate Action Stalled In Salem, Some Businesses Look Beyond Cap And Trade
It’s hard to argue that truckers haven’t been the loudest opponents of cap and trade in Oregon.
Their protests bellowed down the streets of Salem at a Timber Unity rally last month with a long line of log trucks rumbling through the capital.
Their blasting horns sounded the alarm for people like Shelly Solum of Astoria, who works for her father's company, Gedenberg Log Trucking.
She outlined the company's financials for lawmakers at a hearing on Senate Bill 1530, explaining how much more she was expecting to pay for the diesel needed to fuel her company's 10 log trucks.
Oregon's cap-and-trade bill would make gasoline and diesel, along with other fossil fuels, more expensive. In the case of gasoline and diesel, it would require fuel companies to pay for the greenhouse gas emissions coming from their product. The idea is to use higher prices to steer business away from the fossil fuels that are warming up the planet.
Solum and many other truckers say that leaves them with no choice but to pay more for the fuel their businesses depend on.
“If this bill goes through, it’s going to be such a negative effect on our company and the rest of the companies in the state,” Solum said.
Since Republican lawmakers walked out of the capitol last week and left Democrats without a quorum to vote on any legislation, the cap-and-trade bill remains in limbo. Their session is scheduled to end on Sunday, so Oregon lawmakers may not get to vote on the controversial climate bill this year.
Opponents of the proposed cap-and-trade policy who fear higher energy prices are just fine with that. But some companies are gearing up to burn fewer fossil fuels regardless of what happens in the Legislature this session.
Switching To Electric Trucks
Keith Wilson with Titan Freight in Portland sees cap and trade as the cheapest way to move beyond the price of diesel and into electric trucks.
He walked around a truck he calls a triple because it pulls three trailers, pointing out all the fuel-efficiency features he's added to help the truck drive a little farther on a gallon of diesel.
“You’ll see the full roof bearing," he said. "That’s about 5 percent savings. It has low-rolling resistant tires, wheel covers. It has special mudflap screens where the air goes through ...”
Wilson said he’s been trying to get to just 7.5 miles per gallon, and he can’t do it.
“We have 10 fuel-efficiency items on every one of our trucks and trailers and we have received very little gain from it," he said. "We have to do more.”
Each of Wilson's 44 trucks emits about 300 tons of greenhouse gases each year, he said, and there aren't many options for reducing that right now.
“The warming climate is marching its way to Oregon, and it’s at our front door," he said. “We have to act right now, and I feel really responsible.”
He knows cap and trade would raise his fuel costs, but he said it would also offer an opportunity for him to get credits for reducing his emissions by switching to electric trucks.
“We’re almost there," Wilson said. "But that equipment is going to be high cost. It’s first generation."
Oregon's cap-and-trade program would create a carbon market that would allow companies to trade permits for greenhouse gas emissions. So, they could buy the permits they need and sell any credits they earn by reducing their emissions.
Wilson, who is currently running for Portland City Council, is planning to go electric with or without the credits he would get from a cap-and-trade program.
But without cap and trade, he said, other businesses are likely to wait for costs to come down.
"Without that sort of assistance, we're 20 years out before the cost of ownership will be pragmatic for other companies," Wilson said.
Bill Changes Aim To Appease Critics
This year’s cap-and-trade bill was changed to recognize the difference between a log trucking business in Astoria and a freight hauler in Portland.
Sen. Michael Dembrow, D-Portland, who is co-sponsoring the bill, said key changes to this year’s legislation from the 2019 version were designed to ease the fears of rural communities. It would start regulating fuel in Portland in 2022 and phase in other areas of the state later or not at all.
“We do believe that in the urban areas that’s where we have the most opportunities to reduce driving, reduce emissions and help us to our goals,” Dembrow said.
Shelly Solum’s log trucking company in Astoria wouldn’t get hit with higher costs for three years after the program starts.
Other changes to this year's bill exempt natural gas emissions from certain manufacturers to reduce the risk that they'll leave the state to avoid the cost of cap and trade.
However, the broad strokes of the cap and trade policy proposed in House Bill 2020 last year remains the same.
The state would set a cap on emissions and auction off permits, or allowances, needed to cover those emissions. The auction would generate revenue the state can invest in projects that further reduce greenhouse gas emissions and help people adjust to higher energy prices.
Over time, the cap on emissions would come down and fewer permits would be available, which would likely raise the permit price, create an incentive for companies to reduce their emissions and spur more trading in the state's carbon market.
A Carbon-Neutral Gas Pipeline
Changes to the bill have led some industries to withdraw their opposition to the policy. NW Natural, the Portland-based natural gas distributor, has been a vocal supporter of the bill's tailored approach to handling emissions from natural gas.
The company recently unveiled a plan to start replacing the carbon-heavy methane gas in its pipes with renewable natural gas and renewable hydrogen to create what it envisions will eventually be a "carbon-neutral" gas pipeline.
"We do have a long-term vision for our system that's evolving," Kim Heiting, senior vice president of operations at NW Natural, said. "We're an energy delivery company. What's going through our pipes can and will change."
The company is planning to move forward with its plan to reduce the carbon emissions associated with its natural gas regardless of what happens in the Legislature this session.
"As we do that, you get a carbon reduction that's going to help our region achieve its carbon reduction goals," Heiting said.
Opponents Want A Ballot Vote
Still, opponents don’t like the idea of raising energy prices at all — especially in rural areas where the money is tight.
Like the Republicans who have left the Capitol in protest, the crowd at the Timber Unity rally last month was looking beyond what lawmakers are able to do this session.
They chanted on the steps of the capitol: “Let us vote! Let us vote!”
They want to put the whole idea of cap and trade on the ballot and let voters statewide make the final call. That's something state Democrats have resisted so far.
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