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Oregon Senate Votes To Extend Low-Carbon Fuels Program Despite Link To Ethics Scandal

By Cassandra Profita (OPB)
Feb. 18, 2015 12:15 a.m.

The Oregon Senate voted Tuesday to extend the state's low-carbon fuel program despite objections from Republicans that the plan is tainted by the ethics scandal embroiling Gov. John Kitzhaber and first lady Cylvia Hayes.

Sen. Tim Knopp, R-Bend, noted early in a three-hour debate over the bill that the low-carbon fuel program was called out specifically in a subpoena federal investigators issued to the state Friday regarding Kitzhaber and Hayes, his fiancee.

The governor announced his resignation Friday amid allegations that he gave Hayes a role within his administration while she also  took money from groups seeking to influence state policy. The Oregon attorney general and the U.S. Department of Justice have launched investigations into the matter, and on Friday the state received a federal subpoena for documents connected to numerous state initiatives including the low-carbon fuels program.

Knopp and other Republicans argued the connection between the investigations and the state's low-carbon fuel program should give the Legislature pause before voting to lift a 2015 sunset on the program.

"With the uncertainty that exists around this policy and the federal investigations that are ongoing regarding this specific policy that are spelled out in the subpoenas, it is I think an incredible mistake for this body to move forward at this time on this bill," Knopp said. "Even if you agree with the policy, that should give you pause."

Republicans made many other arguments against the bill, too. Most focused on concerns that the requirements in the low-carbon fuel program amount to a hidden "gas tax" that would hurt low-income and rural residents without putting any money into fixing roads.

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Senate Republicans moved to refer the issue to voters and to send it back to committee, but both motions were voted down.

The low-carbon fuel program, also known as the Clean Fuel Program, would reduce greenhouse gas emissions from transportation fuels by 10 percent over a decade. It would require companies that import fuel into Oregon to reduce the carbon intensity of their fuel mix. That would mean substituting alternative fuels such as biofuel, natural gas, propane or electricity for gasoline and diesel.

The Legislature originally approved the program in 2009 under Gov. Ted Kulongoski but designed it to sunset at the end of 2015. Senate Bill 324 would lift that sunset and allow the program to continue until 2016, allowing requirements for reducing the carbon intensity of fuel to kick in.

Sen. Diane Rosenbaum, D-Portland, defended the bill and the program, arguing that it has no connection to the allegations of influence peddling, which stem from money Hayes received through contracts with outside groups for work on issues that overlapped with her work in the governor's office. Development of the low-carbon fuel program dates back to 2008, she said, long before Hayes arrived on the scene during Kitzhaber's third term as governor.

"Distractions and far-fetched accusations aside, this is a well-vetted policy that addresses one of the biggest challenges of our time: human-caused climate change," she said. "As for claims that there is a conspiracy afoot with this program, this is nonsense. There is no link between Cylvia Hayes' contracts and the clean fuels programs."

The bill passed with 17 Democratic votes and no Republican support in the 30-member Senate. It next goes to the House, where Democrats also hold the majority.

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