Oregon prepares to reboot an effort to cut greenhouse gas emissions

Oregon environmental regulators are heading back to the drawing board Tuesday in their push to drastically reduce greenhouse gas emissions from fossil fuel companies after a court ruled late last year that the state’s first attempt was invalid.

When the state’s Climate Protection Program was adopted in late 2021, it promised to be one of the strongest climate action programs in the nation. Combined with other reduction efforts, it aimed to help reduce nearly all of Oregon’s carbon emissions by 2050.

However, oil and gas companies that fell under its regulations criticized the program and quickly filed a lawsuit after the program’s launch in early 2022. The companies were seeking to block the program entirely by arguing the Department of Environmental Quality overstepped its authority while turning an order by former Gov. Kate Brown into administrative rules. The case made its way to the Oregon Court of Appeals, and in December the court ruled the program was invalid for not complying with disclosure of the federal Clean Air Act.

DEQ decided not to appeal the court decision. Instead, the agency opted to restart the rulemaking process, delaying the implementation of the program by at least a year — to 2025. According to the Oregon Climate Action Commission, the delay could continue to hinder the state’s ability to meet its 2050 climate goals, as it’s yet to meet any climate benchmarks and needs to cut emissions faster to meet its own deadline.

‘Deliberate but efficient’

During a March Oregon Environmental Quality Commission meeting, DEQ Director Leah Feldon said her agency will work to get the program reinstated “expeditiously” and will conduct a regular rulemaking process. That could last up to 12 months — a long delay for people concerned about the urgency of addressing climate change, but fast for a rulemaking process — and will include public comment opportunities. Feldon said the goal is to complete the process before the end of the year.

“While we have to do a redo here, this is not starting from square one,” she said. “We really do want to honor all of the time and commitment people have already put into the process.”

Colin McConnaha, DEQ’s greenhouse gas emissions program manager, said a “deliberate but efficient” approach will provide certainty and stability for regulated companies that have already complied with the court-invalidated rules, while also applying what the agency learned in the two years the program was in place.

“We are moving quickly, yes, but also really open to input and really seeking input or additional adjustments that we could make to make the program work more efficiently,” he said.

The stakes

For decades, top scientists from around the world have been raising alarms about fossil fuels’s contributions to climate change. If those emissions are not drastically reduced by 2050, a critical benchmark year to limit global warming to 2.7 degrees Fahrenheit, the world could see catastrophic climate disruptions by the end of this century.

In Oregon, the Climate Protection Program was created to limit and cap greenhouse gas emissions from oil and natural gas companies, targeting a 90% reduction in emissions from those sources by 2050. It was adopted by the Oregon Environmental Quality Commission in late 2021, after an 18-month public rulemaking process that included public town halls and generated more than 7,000 public comments, and went into effect in 2022.

The climate program is intended to make a significant dent in reducing the state’s fossil fuels emissions, DEQ’s McConnaha said. He said the program, in combination with separate legislation requiring electric utilities to provide 100% clean energy by 2040, will help the state meet its 2050 goals.

For regulated fossil fuel companies that continue to emit carbon, the original court-invalidated Climate Protection Program sought to create another option for reducing overall emissions through the Community Climate Investment credit program.

Fossil fuel companies would have been allowed to purchase carbon credits, each credit worth one ton of emissions. Funds collected would have gone toward programs benefiting communities most impacted by climate change. Those could be communities of color, low-income households, tribal, rural or coastal populations, and people with disabilities.

In August 2023, DEQ selected social, racial and environmental justice nonprofit Seeding Justice to lead the carbon credit program.

Seeding Justice officials estimated the sale of carbon credits would generate about $150 million each year. That would have supported public health investments in targeted communities. Funds could also be provided to weatherize homes, install electric heat pumps, and build rooftop or community solar projects.

But the program was shut down when the court deemed the Climate Protection Program’s implementation invalid.

Seeding Justice’s executive director Se-ah-dom Edmo said she was frustrated at the delay brought about by the court ruling. She said Seeding Justice was already in talks with community-based organizations when the ruling halted the carbon credit program’s implementation.

“We’re taking some time to reassess our role and what’s possible for us to do without funds,” she said.

For now, Edmo said, Seeding Justice is staying in touch with the community organizations it hoped to work with.

“What we are hearing from them is that they are ready, they have clients and projects that could use these investments now.”

The process

On Tuesday, the Oregon Department of Environmental Quality and an advisory committee will begin a second rulemaking process for the state’s Climate Protection Program.

Committee members — who come from environmental and climate-focused nonprofits, utilities, fossil fuel companies and other businesses — will hold three public advisory committee meetings. The goals for the Climate Protection Program remain the same. The 25-member committee is tasked with reestablishing limits on greenhouse gas emissions from oil and natural gas companies, to begin in 2025. The committee is also charged with establishing a carbon credit program that would provide benefits for communities most impacted by climate change through a carbon credit program.

After Tuesday’s meeting, the next advisory committee meeting is set for May 14.

DEQ expects to hold its final rulemaking advisory meeting on June 25 and to open a public comment period in late summer. The agency does not plan on doing a major program redesign, and will aim for a 2025 re-start of the Climate Protection Program.

The agency anticipates completing the rulemaking process by fall and presenting proposed rules to the agency’s commission for a vote by November.