Executive Summary

Our continued dependence on imported fossil fuels – primarily petroleum – to meet America’s energy needs is increasingly putting our nation’s economy and security at risk. Petroleum is a non-renewable resource that will persist in driving up energy costs as global production declines. The burning of fossil fuels, long recognized as having impacts on human health and the environment, is also the primary contributor to escalating global warming.

In July 2007, Oregon became the first state in the Union to provide incentives for the local production of feedstocks for alternative, renewable fuels. Oregon also joined a handful of other states, including its neighbor Washington, in enacting a statewide renewable fuels standard, requiring the blending of biodiesel and ethanol in all diesel and gasoline sold at the pump.

In tandem with a new standard to meet 25% of the state’s electricity needs from renewable energy by 2025, Oregon’s investment in renewable fuels development constitutes a forward-thinking strategy that will lead us to a cleaner, more sustainable energy future.

Energy derived from biofuels, wind, solar, geothermal, and wave technology produced in Oregon can serve as a driver of economic development across the state, creating new industry and jobs, reducing energy costs and stabilizing local energy supply. By investing in these renewable resources now, Oregon is positioning itself to be on the leading edge of an emerging low-carbon economy and an exporter of clean energy technologies necessary now and over the long term to combat climate change.

In particular, the establishment of incentives and a stable market for biofuels empowers Oregon farmers and businesses to develop these renewable fuels locally. In many cases, renewable fuels development can provide growers an added income stream, strengthening Oregon’s agricultural sector.

With emerging opportunities to develop and market new clean fuel technologies, renewable fuels development can foster new Oregon-grown industries. These businesses will not only create jobs, but also ensure that an increasing share of our energy dollars (running in the billions of dollars per year) are invested in the local economy, rather than sent out of state or overseas.

While Oregon has an historic opportunity to be on the leading edge of a clean energy future, it should endeavor to do so responsibly, keeping not only economic, but also environmental and social, goals in mind. To maximize greenhouse gas benefits, energy output and efficiency, the conservation of natural resources, environmental protection, public health and other social benefits, the entire biofuels production process must be taken into account – from the fields where the feedstock is planted, through the processing plant, all the way to the tank. Fueling Oregon with Sustainable Biofuels discusses the pitfalls that exist along the way, from water polluted by excess chemical inputs during feedstock production to the release of greenhouse gases from biofuels processing facilities powered by coal.

These pitfalls can be avoided. Biofuels production in Oregon should be geared toward those feedstocks and processing technologies where our state can leverage the maximum benefits and competitive edge. The matrix in section 6.4 of this report summarizes the positives and negatives of a variety of fuels based on the feedstock used to produce them.

As Oregon moves forward with renewable fuels development, the following principles will help ensure that the biofuels produced and used in Oregon will live up to their potential as clean, renewable fuels.

• Support only biofuels that reduce greenhouse gas emissions on a life cycle assessment basis: To ensure that biofuels are in fact reducing global warming pollution, the full greenhouse gas impact of specific biofuels needs to be accurately assessed using a methodology that is updated as the science improves. To the extent possible, agricultural emissions and land use changes (ideally including some value for global land use impacts) need to be fully accounted for. Biofuels should be required to reduce greenhouse gas emissions compared to petroleum in order to qualify for state incentives, and an incentive system that will encourage the development of increasingly more climate-friendly biofuels should be put in place.

• Process biofuels with minimum fossil fuel inputs: Incentives to encourage plants to use biomass, wind, solar or other renewable energy should be put in place. No state incentives should be available for biofuels plants that rely on coal to power their facility.

• Protect air and water quality: Careful monitoring of both tailpipe emissions and localized impacts of biorefinery operations on air and water quality will be required. State policies should be informed by the evolving understanding of these impacts
• Grow biofuel feedstocks using sustainable agricultural practices: To avoid negative impacts on water and soil quality, farmers should use best agricultural practices – including minimal chemical fertilizer and pesticide inputs, buffer zones on waterways, and conservation tillage.
• Conserve water: The total water use for plants and irrigation should be carefully considered before sourcing feedstocks or locating biofuels production facilities. Incentives to encourage water conservation should be implemented, and research should be done to identify and develop drought-resistant feedstocks.
  

• Protect biodiversity: Biofuel and bioenergy production poses a range of threats to biodiversity if habitat is disturbed. Impacts on native species should be carefully considered as the industry develops.
• Avoid conversion of native ecosystems: Converting native grasslands or forests to agriculture, short-rotation woody crops, or tree plantations eliminates any greenhouse gas benefits from even advanced biofuels and does serious harm to biodiversity. 
  
• Support socially responsible and locally owned biofuels production: Local communities have the greatest investment in their environment, and encouraging local input, ownership and control of biofuel production will help ensure real sustainability. 
• Provide consumer information: Biofuel producers should be required to provide sufficient information on feedstocks and production practices to allow consumers to make an informed decision about which biofuels they purchase. Ideally, there would be a system of either voluntary or mandatory labeling that indicates the greenhouse gas balance, if not more detailed environmental and social criteria.
  

Both public and private institutions have a role to play in promoting these best practices to maximize the social, economic and environmental benefits of renewable fuels development. First and foremost, Oregon should adopt a Low-Carbon Fuel Standard (LCFS). A LCFS requires all fuel providers to gradually reduce the greenhouse gas intensity of the fuels they sell, but doesn’t mandate how they meet the standard. It creates a high-value market for renewable fuels that provide the highest greenhouse gas improvements and associated environmental benefits. An Oregon LCFS would focus technological innovation on sustainability and increase Oregon’s already strong comparative advantage in renewable fuels development and a clean energy future.

Besides a Low-Carbon Fuel Standard, Fueling Oregon with Sustainable Biofuels recommends a number of other policies that will put Oregon at the forefront of sustainable biofuels production. These policies are summarized in Appendix I.

Oregon is uniquely positioned to become a leader in the development of sustainable biofuels. The Oregon Environmental Council hopes that this report will provide Oregon government, agriculture, business and citizens some of the analysis and tools needed to take advantage of this opportunity.