The Oregon Department of Environmental Quality’s proposal to reduce greenhouse gas emissions from fuel suppliers and large stationary sources would align the state with California’s ambitious targets, but some residents and environmental advocates last week said the rules won’t go far enough or fast enough.

At the same time, representatives from business and agriculture warned the new rules could hobble the state’s economy and transfer production to places with more lax environmental regulations.

The DEQ this month floated its proposal for the Climate Protection Program (CPP) in response to Gov. Kate Brown’s Executive Order 20-04, which directed each state agency to develop measures that help reduce Oregon’s GHG emissions to 45% below 1990 levels by 2035 and to 80% below by 2050.

The CPP would cover the state’s natural gas utilities and suppliers of gasoline, diesel, kerosene and propane. It would also apply initially to stationary facilities that emit at least 200,000 metric tons (MT) carbon dioxide equivalent (CO₂e) a year, with that threshold falling to 25,000 MT by the end of the decade. In its current draft form, the rules exempt emissions from the state’s gas-fired power plants, which are already subject to other regulations.

If approved by the state’s Environmental Quality Commission (EQC), the new rules would go into effect next year, setting an initial cap of 28.2 million metric tons (MMT) of emissions for covered entities, which is based on average 2017-2019 emissions. That cap would decrease to 16.9 MMT in 2035 and 6 MMT in 2050, representing an overall cut of 80%.

Under the program, the DEQ would issue covered entities compliance instruments in amounts equivalent to each year’s cap. Participating entities would be allowed trade unused instruments or bank them for future use.

“This both incentivizes early emission reductions and provides flexibility for covered fossil fuel suppliers, allowing them collectively to find the lowest-cost emission reductions,” the DEQ said.

The program would require covered entities to submit a compliance instrument or community climate investment credit (CCI) for every metric ton of CO₂e. Participants could earn CCIs by contributing funds to third parties that develop GHG-reduction projects in Oregon. The DEQ would initially set the CCI contribution value at $81, increasing it over time. At the outset of the program, covered entities would be eligible to use CCIs to meet 10% of their compliance obligation, eventually rising to 20%.

‘Things are Changing Fast’

Testifying Wednesday at a virtual public hearing hosted by the DEQ, several Oregon residents criticized the agency’s plan for not being ambitious enough in the face of alarming changes in the state’s climate.

Oregon has experienced massive wildfires during the past two summers, and like much of the West, it is suffering from “extreme” or “exceptional” drought in most areas, according to the U.S. Drought Monitor. A June heat wave saw temperatures across the state shatter previous records, with Portland hitting a high of 116 degrees Fahrenheit.

Melanie Plaut, a retired Portland-area OB/GYN physician, said she was testifying out of concern for her granddaughter and all the babies she delivered during her career.

“The U.N. has recently said that we have this decade to make a difference — and I emphasize this decade,” Plaut said. “So, I’m going to ask that you put a more stringent cap on emissions: The CPP should decrease emissions 50% by 2030. The work we do now is much more valuable than action delayed, which is essentially the equivalent of climate denial.”

Plaut also said the plan must take a more serious approach to methane emissions, noting that the state’s six largest stationary polluters are gas-fired power plants that burn fracked natural gas.

“Although I understand the rationale behind avoiding double regulations, this loophole is way too large, and not only gives these larger polluters a loose rein, it ignores the upstream climate effects from methane leakage and the local pollution effects whose burden falls heavily on the communities surrounding the plants,” Plaut said.

Linda Kelley echoed Plaut’s concern about the CPP’s exclusion of gas-fired generators, saying the plants should be brought under the cap. “There’s no other way to have any hope of reaching climate stability,” she said.

Kelley said she worked for seven years in the source testing lab of the Bay Area Air Quality Management District and understood the challenges of regulating polluters after developing relationships with people in industry.

“That said, the natural gas industry must pivot quickly. They will likely try to hang on, fight and scare people into believing we cannot live without natural gas. We actually cannot live with it anymore,” Kelley said. “Their business model is an existential threat to us. We have the sun above us and a stable heat source in geothermal below us. We have solutions to our dilemma. We just need to stop the harm.”

Deborah McGee, a former teacher and co-founder of climate justice group 350 Eugene, said “things are changing fast” on the forested land where she has lived for 37 years outside the city of Eugene. McGee pointed to the death of Douglas firs from drought, an unusually heavy snowfall that collapsed her greenhouse and the destruction of subsistence crops from June’s heat wave.

“And today I sit with 150 feet of fire hose outside my door, hooked up to a 25,000-gallon water tank, waiting for the fire to come; if not this summer, then next. I am frightened of these fires,” McGee said.

Allie Rosenbluth, campaigns director for Rogue Climate, recounted that a year ago, she was just returning to her home in the city of Talent after evacuating from the “climate-fueled” Almeda Fire, which destroyed hundreds of homes in her community. Despite serving on the advisory committee that helped draft the CPP, Rosenbluth said the rules do not fulfill Gov. Brown’s directive and “represent a missed opportunity to take the swift and aggressive action necessary to avoid the worst impacts of climate change.”

“DEQ must revise the program to ensure real pollution reduction in frontline communities,” she said. “This means ending exemptions for the largest polluters and eliminating or limiting offsets, banking and trading, ensuring that the CCI program is prioritized for and is accessible for tribes and other frontline communities, reducing thresholds [and] increasing greenhouse gas-reduction goals to science-based targets.”

Another participant in the draft rulemaking process, Pat DeLaquil with the Metro Climate Action Team, agreed with other speakers that the proposal does not go far enough.

“Given the ever increasing cost of climate impacts, DEQ must enact targets in line with the best available science, which requires an emission-reduction target of 50% by 2030 and 100% by 2050,” DeLaquil said. He called for greater public review of the program’s best available emission-reduction process for stationary sources, saying that it must “require long-term emission reductions in line with the technical potential for that particular industry subsector.”

‘Negative’ Impacts

Defending the perspective of the natural gas sector was Mary Moerlins, director of environmental policy and corporate responsibility for NW Natural and another participant in the committee that drafted the rules.

Moerlins said Oregon’s largest gas utility is “pleased that our voluntary goal of carbon emission reduction is directionally aligned with the state’s target within the Climate Protection Plan. We know we want to decarbonize, and we know that we will, and that’s a good place to start.”

But, she said, NW is concerned that the CPP “breaks with all other established carbon regulation policies” because it lacks “instruments for cost controls or off-ramps” in the case of high costs related to meeting targets. The company also seeks more clarity on the CCI concept to get a better understanding of the potential supply of projects.

Sharla Moffett, director of energy, environment, natural resources and infrastructure with Oregon Business & Industry, said the GHG policy must balance environmental and economic considerations to prevent the state’s businesses from being “placed at a competitive disadvantage either nationally of globally.”

“The proposal does not accomplish these objectives and should be modified to address the cost of compliance, consider the global impacts of transferring emissions elsewhere, [and] ensure that the program produces actual verifiable certifiable reductions of greenhouse gas emissions,” Moffett said.

Although the rules would not cover agriculture, representatives from that sector warned about their indirect impact on farmers.

Citing recent closures and restrictions affecting the state’s breweries and brewpubs, Michelle Palacios, executive director of the Oregon Hop Growers Association, said the CPP “would greatly increase the cost of natural gas for local hop growers at a time we can least afford it.” Once the second largest hop-growing state in the country, Oregon has been displaced from that rank by Idaho, which has cheaper energy and land, Palacios said.

“Most Oregon hop growers use efficient natural gas burners to drive pumps during harvest in August and September. We prefer natural gas because it’s currently the cleanest fuel option,” she said, adding that reduced access to and higher prices for natural gas will “negatively affect” the state’s $6.6 billion beer industry.

Angi Bailey, president of the Oregon Farm Bureau, said higher natural gas prices will prevent family-scale farms from investing in needed climate resilience measures. She complained that farmers are not able to estimate the impact of expected fuel-price increases because the DEQ has not even modeled them.

“While [the CPP is being done] under the premise of climate change, I must point out that climate change is a global issue that requires a global solution. This program will do nothing to stop climate change, but [it] will have very real impact on rural Oregonians, many of whom are already struggling to make ends meet,” Bailey said.

The EQC will hold a second public hearing on the draft CPP rules this Thursday, and comments are due to the DEQ by Oct. 4. The department expects to issue final proposed rules to the EQC in November.