Climate-change regulations challenged in court by Oregon utilities, industry groups - OregonLive

Climate-change regulations challenged in court by Oregon utilities, industry groups - oregonlive.com

Oregon’s three gas utilities, an oil-industry group and a dozen other local trade organizations say the state lacks the authority to force them to significantly curb their carbon pollution.

The claim, which was repeatedly made during oral arguments on Friday at the Oregon Court of Appeals, is the backbone of an attempt to block Oregon’s aggressive Climate Protection Program from being implemented.

The program, approved by the Oregon Environmental Quality Commission in December 2021, mandates ever-increasing cuts in emissions from the state’s natural-gas utilities and suppliers of gasoline, diesel, kerosene and propane. It also requires existing and proposed large industrial facilities to reduce carbon pollution through the best available emissions-reductions approaches. The program went into effect in January 2022.

Its goal is to reduce Oregon’s greenhouse gas emissions by 50% by 2035 and 90% by 2050.

The legal challenge to the regulatory effort involves three separate lawsuits filed against the Oregon Environmental Quality Commission, the policy and rule-making board for the state’s Department of Environmental Quality. They include one case filed by utilities NW Natural, Cascade Natural Gas and Avista; another filed by the Western States Petroleum Association; and a third filed by a coalition that includes the Oregon Business & Industry, a statewide trade association, and groups representing farming, logging, manufacturing and other interests.

Oregon law allows a direct petition to the Court of Appeals to determine the validity of a rule or program approved by the state.

Megan Berge, an attorney representing the utilities, said the state can’t regulate the companies’ emissions because they are not direct or immediate sources of air contamination. They merely distribute the fuel, said Berge, and it’s the residents or business owners who combust the natural gas and hence cause the carbon pollution.

“Fuel suppliers do not emit greenhouse-gas emissions,” Berge told the judges.

Carson Whitehead, the attorney representing the Environmental Quality Commission, said the definition of an air-contamination source under the program can include activities that ultimately cause pollution, not just emissions that come out of a smokestack.

Berge also argued the Climate Protection Program aims to reduce the amount of natural gas the utilities can sell to customers, saying this violates the Oregon Public Utilities Commission’s duty to ensure that all customers receive adequate supplies. The trade groups made a similar argument, saying that the program would reduce fuel available for tractors and other agricultural equipment, even though agricultural activities are exempt from the regulations.

Whitehead said that’s not the case. The program does not limit the amount of fuel supplied, he told the judges. The utilities and industry can use lower-emission alternatives, he said. For example, utilities can work to replace high-emitting natural gas with lower-emitting fuels such as renewable natural gas (RNG) or green hydrogen. Diesel-fuel suppliers can rely on biofuels, he added. And the burden of that replacement falls on fuel suppliers, not on farmers or homeowners.

Utilities and other fuel suppliers will also have access to a system called the Community Climate Investment Fund, through which they can contribute funds for local carbon-reduction projects in place of reducing some of their emissions.

“We dispute that the end goal is to reduce the supply of fuel. The end goal is to reduce emission,” Whitehead said.

Following oral arguments, environmental advocates — including those representing dozens of organizations approved by the court as parties to the case — gathered outside the courthouse to rally in support of the Climate Protection Program.

“We cannot continue to put Oregon lives and livelihoods at stake just to preserve business as usual for oil companies and gas utilities. These same companies are on the one hand publicly claiming to be part of the climate solution, while simultaneously suing the state to overturn protections for Oregon’s climate and communities,” said Nora Apter, senior program director for climate at the Oregon Environmental Council.

It’s not known when the court plans to issue a ruling in the case.

– Gosia Wozniacka; gwozniacka@oregonian.com; @gosiawozniacka

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