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Energy:
Biofuels

Our Position: monitor
Bill Number: HB 2210
Sponsor: Pre-session filed by the Oregon Department of Energy and Governor Kulongoski
Legislative Session: 2007

This bill establishes a renewable fuel standard, requiring a certain percentage of the fuel produced in Oregon to be from sources including grain ethanol and oil rich seed-crops such as canola. Establishes tax credits for the production of ethanol and biofuels in Oregon as wells as tax credits for individuals that purchase biodiesel or ethanol blends for their automobiles.

Status

After hearings throughout February, this bill passed the Oregon House handily on March 1. Due to the presence of tax credits it ended up in the Senate Revenue Committee, finally passing both Houses at the end of the session and getting signed by Governor Kulongoski.

The Sierra Club testified on our concerns about incentivizing forest biomass for 'cellulosic' ethanol as well as providing tax credits for corn ethanol production, which involves corn shipped from the midwest to be processed at ethanol plants in Oregon. Corn ethanol production can generate harmful air pollution with limited or no reduction in global warming gases, particularly when grain is shipped from the midwest or coal is used in the ethanol production process.

Ultimately, the bill's langage was amended to exclude corn ethanol from the tax credit and to constrain the definition of eligible forest biomass to only those projects that improve forest or rangeland health while reducing wildfire risk, an improvement from biomass langage passed by the legislature in 2005. While not ideal, this constrained definition, combined with the technological infeasibility of producing cellulosic ethanol from forest biomass on a large scale, provide some comfort as we monitor how this part of biofuels industry develops in coming years.

Ultimately, HB 2210 provides the greatest incentives for Oregon and Northwest growers of canola and other oil-seed crops, as well as wheat and grain growers whose products can be converted to non-corn ethanol.

Contact

Contact Ivan Maluski at 503-238-0442, x304 or ivan.maluski@sierraclub.org for more details.

Background

When crafting policies for forest biomass, steps must be taken to ensure that biomass production does not inadvertently promote unsustainable forest practices. Proposals that incentivize biomass collection from federal forests have the potential to undermine efforts to protect old growth trees, roadless areas, sensitive watersheds and endangered species habitat.

The Sierra Club believes that the priority effort for fire risk reduction on public lands should be to remove small-diameter hazardous fuels around forested communities where the natural fire cycle has been suppressed and forest fire is a significant threat. Some limited-scale, local biomass to energy projects may be a good fit in these instances. Generally, however, the reliance on large areas of federal lands to supply large-scale biomass plants will likely create unreasonable demand for the byproducts of poor forest management and logging practices, increasing the pressure to disturb forests that deserve protection.

The Sierra Club also strongly supports investments in biodiesel created from recurring oil-seed crops such as canola, which can be grown in Oregon as part of regular crop rotation cycles without intensive water use. However, we urge caution in promoting corn-based ethanol in Oregon. The production of ethanol from corn can create its own pollution, including carbon monoxide, methanol, toluene, sulfur dioxide, nitrogen oxides, and volatile organic compounds. Corn is also a very water intensive crop to grow, and a shift to large scale production in the Northwest to meet ethanol demands would put additional pressure on existing water supplies. Further, the widespread use of petroleum based fertilizers for corn production, as well as the petroleum used when shipping corn from other parts of the country, can significantly undermine the value of corn ethanol as an alternative to fossil fuels. We were pleased to see the final version of HB 2210 exlude corn ethanol from production incentives.

Ultimately, renewable fuel standards need to be coupled with increased fuel efficiency and conservation to have the largest impact. A recent study by Oregon State University found that increasing the fuel efficiency of Oregon's cars by one mile per gallon would equal the energy savings of three to four corn ethanol plants or thirteen biodiesel plants