Clean fuels controversy: Energy, trucking groups sue to block low-carbon standard – The Oregonian (March 2015)

Source: The Oregonian

SALEM — Three groups are suing Gov. Kate Brown and state environmental regulators to block the rollout of Oregon’s clean-fuels program.

The lawsuit, filed Monday in federal district court in Portland, argues the program violates the commerce clause of the U.S. Constitution by discriminating against fuel importers and regulating out-of-state businesses.

The challenge is brought by American Fuel & Petrochemical Manufacturers — a Washington, D.C.-based coalition that represents some of the world’s largest oil companies including Exxon Mobil, Shell and BP — as well as American Trucking Associations and the Consumer Energy Alliance. In addition to Brown, the lawsuit names Oregon Attorney General Ellen Rosenblum, as well as members of the Oregon Department of Environmental Quality and Environmental Quality Commission who oversaw the program’s development.

It is the second court challenge filed since lawmakers approved controversial legislation to extend the clean-fuels program on March 4. The Western States Petroleum Association, a group of oil distributors that lead lobbying efforts against the bill, has already asked the Oregon Court of Appeals to block the program.

The court challenges could undermine what Democratic lawmakers hope to be a lynchpin in the state’s effort to fight global warming. The clean-fuels program requires oil and gas distributors to lower their carbon “intensity” — the measurement of emissions created throughout a fuel’s lifecycle — by 10 percent over the next decade.

A similar federal lawsuit stalled California’s clean-fuels program for three years. Then in 2014, the U.S. Supreme Court declined to hear the case, letting stand a circuit court ruling that upheld the law.

But plaintiffs contend they have a better shot at victory in Oregon because of differences in the state’s fuel economy. Unlike California, there are no in-state refineries, which could bolster plaintiffs’ argument that Oregon’s law constitutionally regulates out-of-state businesses.

“The discrimination claim is significantly stronger,” said Rich Moskowitz, an attorney for American Fuel & Petrochemical Manufacturers. “The action comes completely at the burden of out-of-state interests. It does not burden in-state and out-of-state interests in the same manner.”

They’re also arguing Oregon’s law unconstitutionally preempts the Clean Air Act and increases regulatory costs for truckers.

The DEQ estimates the clean-fuels program could raise gas prices between 4 and 19 cents by 2025.

“Just as trucking is the lifeblood of our economy, for the foreseeable future, diesel fuel is the lifeblood of the trucking industry,” Bill Graves, president and CEO of American Trucking Associations, said in a statement. “Anything that unnecessarily raises the cost of fuel will not just hurt the trucking industry, but will also hurt consumers everywhere in the form of higher prices for food, clothing and other consumer goods.”

— Ian K. Kullgren

ikullgren@oregonian.com

503-294-4006; @IanKullgren

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