“The Oregon Department of Justice (the “DOJ”) has a short memory.”
Such is the opening sentence of a recent legal filing by the Western States Petroleum Association, which has joined Chevron and an Iowa biofuel giant in suing to keep records related to Oregon’s Clean Fuels Program secret. The sentence demonstrates, if nothing else, that lawyers, too, can be snarky.
The DOJ opened itself up for criticism last month by ordering the release of information showing, among other things, the identities of buyers and sellers of credits under the state’s fuel program. In doing so, the department reversed its position in a similar case decided 18 years ago, argues attorney Cody Elliott of Miller nash Graham & Dunn in support of his allegation of institutional amnesia.
To his credit, he did not write, “So, there!”
The courts will decide the validity and relevance of Elliott’s claim. In the meantime, Oregonians and their elected representatives should exercise their own memories and consider some of the things Elliott’s client had to say about the Clean Fuels Program less than four years ago. WSPA’s campaign against the program back then should give pause to anyone inclined to buy its bid for secrecy today.
The Legislature approved the creation of the Clean Fuels Program back in 2009, but the effort limped along until 2015, when lawmakers made the controversial decision to eliminate its looming sunset date. Among those opposed to this rescue effort was WSPA, which represents the oil industry in a handful of Western states. WSPA warned lawmakers in February 2015 that “the potential unintended consequences of experimental policies like those embodied in” the Clean Fuels Program “are simply too great.” Policymakers should look, instead, for “less risky and less costly ways to address the state’s contribution to global climate change.”
The fuel program is designed to reduce the carbon intensity of road fuels, a measure that includes the carbon emissions produced by fuels during their entire life cycles, from production to use. The carbon intensity of conventional gas and diesel can be reduced modestly by blending lower-carbon fuels such as ethanol and biodiesel. Beyond that threshold, the program expects gas and diesel importers —WSPA’s members — to meet escalating carbon-reduction requirements by purchasing credits from, among others, the producers of cleaner fuels.
To call the program complex would be an understatement, and in 2015 WSPA warned that it would rely on “an intricate combination of fuels, vehicles and consumers to make it work.” As for the credit market, WSPA noted that California’s version of the Clean Fuels Program, which predates Oregon’s, had been plagued by volatile credit prices and volumes. The fuel group even submitted a graph showing the spikes and dips in California’s credit market from 2012 to 2014. WSPA clearly hoped that its dire warnings about the cost, complexity and unintended consequences of the Clean Fuels Program would serve as arguments for its elimination. To that end, the warnings failed. But they are powerful arguments for transparency.
The transfer of carbon credits represents the movement of public money. The oil companies that must buy credits pass along costs to motorists, who pay an invisible tax at the pump. Clean-fuel companies and similar entities collect this money in the form of a subsidy by selling credits to oil companies.
Oregonians and their elected representatives ought to have the opportunity to follow their cash, if only to be assured that this “experimental” policy works as it’s supposed to. Unfortunately, credit sales now happen in secret.
And that suits WSPA just fine despite its suggestion that the Clean Fuels Program is a lemon. The group insists that the oil companies it represents would be harmed if the state released detailed credit-transaction information, including the identities of those entities making each trade. It even asserts that this information, which shows the expenditure of public money, deserves protection from disclosure as an industry trade secret. That claim is nothing if not brazen.
The courts may or may not buy this argument, but lawmakers should reject it. Even better, they should require full disclosure of credit-sale information when they meet next year. If WSPA and its allies complain, lawmakers should remind them that they’re elected to represent the interests of Oregonians, not those of fuel companies that would like to continue spending and collecting public money in secret.
Lawmakers should be particularly sensitive these days to the value of government transparency. Democrats, who will enjoy supermajorities in both chambers, are expected to push through a cap on carbon emissions, which almost surely would be forced to the ballot for a public vote. Oregonians will be much more inclined to support such a program if they believe the deck isn’t stacked in favor of regulated industries and against taxpayers and the transparency to which they’re entitled.
And voters have long memories.