Anatomy Of A Law In Oregon

Here is some background on how HB 2210 passed through the legislature.

If you would like a concise summary of the strange anatomy of HB 2210, without the links to the audio, click here for a pdf document.

You can see how the bill progressed in the legislature by going here and selecting the House Bill radio button, under the House Measures heading, then entering "2210" in the Number window and pressing the "Search" button. Simple enough isn't it, if you know where to look, but Google can't spider it so you won't find this information with a search engine. If you would like to hear testimony in the House Transportation Committee for SB 1079 which is trying to modify HB 2210 it is here.

From people that I have talked to in the gasoline wholesale industry and the auto service industry, HB 2210 was a "done deal" once the tax incentive for corn was removed. If you track its progress through the hearings, it sailed through the legislature.

Public hearings started in a joint House Energy and Environment Committee / House Revenue Committee hearing which took place on January 24 and a second one on January 26. There was one more House Energy and Environment Committee meeting on January 29, 2007. The committee meetings were almost exactly 2 hours each day for a total 6 hours for a bill that will economically impact everyone in Oregon. If you look at these three documents, which are logs for the hearings on 24 Jan., 26 Jan. and 29 Jan. 2007, you will see that Paul Koehler, Vice President of Business Development for Pacific Ethanol was right there the first day, along with Thomas Endicott, Manager, Sequential Biofuels and Jeff Kropf, Executive Director, Northwest Renewable Fuels Association and Charles Carlson, President, Cascade Grain Products, which is building the big ethanol plant in Clatskanie, OR. You can listen to the testimony on 24 Jan. here, 26 Jan. here and 29 Jan. here. If you are looking for the on line audio transcripts of the legislature sessions go here and then drill down to what you are looking for.

The testimony of 24 January is interesting in that it was made up entirely of companies and farmers looking for a handout and guaranteed access to markets, meaning your pocketbook. There was nobody there representing the public's economic interest. The high point of the hearing was when Republican Representative Greg Smith from Heppner asked if it was really necessary to mandate the E10 law, and Charles Carlson, President, Cascade Grain Products replied that, yes it was really necessary to mandate E10 and in the same breath stated "... we reduce the cost of gasoline at the pumps." That statement, of course, is a bald faced lie. What a merry lovefest between politicians and greedy businessmen who can smell the profits of captive markets. And Representative Smith must have bought it because he voted for HB 2210, but then he represents the district where the Port of Morrow is located and the Pacific Ethanol plant was built that "triggered" HB 2210.

The first hour of testimony of 26 January was entirely about biodiesel. It is interesting to note that there are were numerous references about how biodiesal was going to improve the "lubricity" of low sulfur diesel, which is now mandated by the Federal government because obviously sulfur is not a good thing to be spewing into the air, but there is never any mention that ethanol is going to decrease the lubricity of gasoline because it is a solvent. This lubricity subject has a direct bearing on fuel pump failures when the pump is immersed in your gas tank as it is in practically all modern fuel injected cars. Here is what can happen.

It is also interesting to note that all through the biodiesel testimony there is concern that the implementation of biodiesel be "done right" because if there are any problems, like the one that happened in Minnesota in 2006, the politicians know that they are going to be blamed, and that is exactly what the witnesses are telling them and the politicians are all verbally agreeing with that observation. Yet, nobody brings up that same fact with ethanol. Nobody tells the politicians that if cars and boats and tools are damaged by E10, the politicians are going to be blamed. What a bizarre disconnect.

The original 90 million gallon threshold trigger was brought up by Gary Neal, General Manager, Port of Morrow at about 1:05:45 into the 26 Jan. recording and he subtly asked for consideration of decreasing the threshold to match the output of the new Boardman Plant and Chairwomen Dingfelder was only too happy to help him out because, as she stated, "... we certainly will. We've heard that concern from several other people who we appreciate." Can you guess who Chairwomen Dingfelder "appreciated"?

Everyone should listen to the testimony of Brian Doherty, (Attorney) Lobbyist, Western States Petroleum Association that starts at 1:22:07 on the 26 Jan. recording. He presents information on how WSPA was locked out of the Governor's Renewable Energy Workgroup, even though their industry has to implement the delivery of all biofuel in Oregon, both biodiesel and ethanol based. He makes an excellent presentation of the problems with a mandated program. He also points out how ridiculous the implementation timetable is in HB 2210. His warning was completely ignored.

There were some very interesting tax consequences illustrated by Jody Wiser, Founder, Tax Fairness Oregon. Her testimony starts at 1:55:20 on the 26 Jan. recording.

The testimony given on 29 January 2007 lasted just over one hour for HB 2210, the rest of the recording deals with other bills. At 25:10 into the testimony Brian Harris, President, Harris Transportation Co. and Chairman of the Oregon Trucking Association testified and was against fuel mandates because they increase the price of fuel. Then Kim Puzy, General Manager, Port of Umatilla gave some eye popping testimony on the type of low grade gasoline blend components that must be blended with ethanol because of its very high octane, and then the mind boggling amount of byproduct distillers grain of the large scale ethanol plants that are being built in the Northwest and how many cattle you need close by to feed, at 30:25 on the recording. (If you want to be scared shitless about the possibilities that Mr. Puzy discussed, look at this, scroll down to the February 10, 2007 article, "Ethanol Production: Full of S#&*?".) At 36:42 John Charles, Cascade Policy Institute gave very brief testimony that is a must hear. He gave very forceful arguments against mandated energy programs as proposed in HB 2210. He also pointed out that the king has no clothes when it comes to the minimal environmental energy gain of ethanol.

So, all told the Oregon House of Representatives held five hours of Public hearings on a bill with a huge economic impact on every citizen in Oregon. Probably less than half of the testimony had to do with E10, since most of it had to do with biodiesel because that will be what helps Oregon agriculture. There was not one person or organization representing the economic interests of small business or the common citizen. There was only one expert on the efficiency or effectiveness of an E10 program, John Charles, Cascade Policy Institute and he warned that a mandatory E10 policy was not wise, one of three witnesses that testified against mandates for biofuel programs. There was not one witness that testified to the negative effects of E10 or that fact that it reduces gas mileage or reduces the power of stationary engines or tools. There was no representation from automobile organizations, like AAA or classic car clubs or motorhome associations like Good Sam or FMCA, no representation from the Oregon Marine Board representing boaters, nor from the Oregon Department of Aviation representing pilots, no representative from the Forest Service, no representative from any Public Safety or fire fightning agency, nor from any organization representing small businesses that were going to be affected by the bill, like tool rental businesses or landscape maintenance businesses, no representatives from any Chamber of Commerce that might represent small businesses affected by the bill, no representative from car fleet operators, no representatives from auto repair businesses, etc.

Next, there were two House Energy and Environment committee Work Sessions, on 2 Feb. and 5 Feb. 2007. You can listen to the session on 2 Feb. here. The HB2210 Work Session was moved to the end of the Work Session after working on two other bills, so skip to Clip 2 for the HB2210 Work Session. Most of the discussion is about the tax incentive issues. At 27:00 into the recording there is some quick discussion of the wording about the ethanol provision, indicating the change from 90 to 40 million gallons / yr. "capacity" to reflect the Port of Morrow ethanol facility coming on line. So there you have it. If you ask for a change to the bill to benefit your business, no problem, you get it with no discussion about the sensibility for E10 production across the entire state of Oregon or the economic impact on all of Oregon. The session on 5 Feb. here.

There was one more Public Hearing before the House Revenue committee on 13 February 2007, see log here and listen to the session here, and then there were two more House Work Sessions on 15 Feb. and 19 Feb. 2007. You can listen to the session on 15 Feb. here, which actually starts as a continuation of the Public Hearing of 13 Feb. then switches to a Work Session on another bill, and the session on 19 Feb. here, but be advised that the actual work session on HB 2210 doesn't start until 30 minutes into the 19 Feb. tape. These Revenue committee hearings are really about the tax incentive issues mainly with biodiesel. There is no discussion about the impact of E10 on the citizens of Oregon.

The "Second Reading" of the bill took place on 27 February 2007 in the Oregon House. There was no actual "Reading" of the bill much less any debate on the bill. The bill was voted on and passed in the Oregon House by a vote of 53 - 4 and 3 "Excused" on 01 March 2007. You can listen to the session here, skip to clip 2 and the vote for HB2210 is the first debate. There is an absolutely hilarious statement from Representative Cannon at 16:20 into the recording: "In committee we heard farmers, from Eastern Oregon, renewable fuels business people, environmentalists and advocates for working families come together in support of this concept." I don't know what Representative Cannon is smoking, but he should be sharing it, because there weren't any "... advocates for working families." Of course what is really scary, and which no politician ever adresses, is that there was never any testimony from anyone representing Public Safety. Pump prices finally come up at 28:30 into the recording on a question by Representative Morgan. Representative Barnhart dances around the issue, claiming it came up in the Public Hearings. I believe he misrepresents what came up, because the only testimony of pump prices was during the first day of hearings when Charles Carlson, President, Cascade Grain Products stated "... we reduce the cost of gasoline at the pumps.". Why would a monopoly reduce prices? They have no incentive to, which is exactly what John Charles of the Cascade Policy Institute said, and Brian Harris, President, Harris Transportation Co. and Chairman of the Oregon Trucking Association testified that those places in California that mandate CARB diesel, which is a type of clean air diesel, have the most expensive diesel in the state. It is interesting to note that there is a line about "Potential" conflict(s) of interest that were declared by Clem, Nolan, G. Smith and Thatcher. That didn't stop them from voting, although Thatcher voted against the bill.

The bill then moved to the Senate and the first Public Hearing was held 05 Apr. 2007 by the Senate Committee on Environment and Natural Resources. This public hearing was all of one hour and a few minutes and actually covered three bills, HB 2210, HB 2211 and HB 2212. You can listen to the testimony here. The same cast of characters showed up for this hearing, Tim Raphael, Director of Government Affairs, Pacific Ethanol, and Thomas Endicott for SeQuential Pacific Biofeuls (sic) and Charles Carson for Cascade Grain Products and Chris Beatty for Trillium Fiberfuels, etc. At 55:00 into the testimony Brian Doherty again warned that the three-month scheduled is untenable and even proposed a date certain in third quarter 2008 for eastern Oregon. There is a great one liner in the testimony at 56:38 on the tape. Tom Gallagher from Chevron said "The Chevron Pipeline company does not believe that it will be able to meet the timeline in the bill to deliver product to eastern Oregon". You need to understand that this is not a one company problem, Chevron Pipeline represents many different gasoline brands in eastern Oregon. It operates two terminals, one in Pasco, WA and one in Boise, ID. Notice how everyone that is involved with delivering energy product in Oregon is telling the legislature that the implementation schedule of three months is completely unrealistic. That schedule remained at three months throughout the entire lawmaking process and is the law today.

Later in the afternoon on 05 April 2007 a Work Session was held that included HB 2210 among many other bills, you can listen to it here, the testimony on 2210 starts at 39:50 and ended at 43:10 with a referral to the Senate Finance and Revenue committe. Nobody testified on the economic impact on the citizens of Oregon.

A two hour Public hearing was held by the Senate Finance and Revenue committee on 10 May 2007, again, on all three bills, HB 2210, HB 2211 and HB 2212 and it is all about the tax incentives. The HB 2210 tax incentives testimony lasted for only the first 32 minutes of the hearing. You can hear it here. Two more work sessions were held by the Senate Finance and Revenue committee on 31 May and 19 June 2007, although I can find no audio recording of the 19 June meeting.

The bill was voted on and passed by the Oregon Senate by a vote of 24 - 3 and 3 "Absent" on 21 June 2007. You can hear the debate at 32:51 into the 3rd clip here. It is a joke. There was no debate except a very concise statement by Senator Gary George against the mandates required by HB 2210.

HB 2210 was signed into law on 03 July 2007 by Governor Kulongoski, but it did not mandate E10 across the state without exception until the trigger was pulled and that didn't happen until approximately October 7, 2007.

I urge you to call, email or write your legislators and ask them to repeal this law.