Oregon begins rewriting landmark climate program derailed by gas lawsuit

State environmental regulators are working on rewriting a greenhouse gas reduction program stymied by a gas company lawsuit.

The Oregon Department of Environmental Quality announced Monday it would restart the process for creating a new Climate Protection Program, which was approved three years ago to confront the growing threat of climate change. The program – requiring fossil fuel companies operating in the state to gradually reduce their greenhouse emissions 50% by 2035 and 90% by 2050 – was invalidated by the state’s second highest court in December in a lawsuit over required disclosures.

The committee in charge of remaking the program will hold its first public meeting April 2, and two others on May 14 and June 25. The Environmental Quality Department will seek to re-establish a program of “similar scope and ambition,” according to a Monday news release.

The meetings will be followed by a public comment period. Lauren Wirtis, a communications manager for the department, said the agency is prepared to present a new framework and rules for a revived Climate Protection Program to the Environmental Quality Commission for approval later this year. Wirtis previously told the Capital Chronicle it is possible some parts of the original program could change.

Under the program, fossil fuel companies were allowed to offset some emissions under the plan by buying carbon credits and investing in nonprofits working to combat climate change and reduce harmful emissions. That’s now on hold, as is a grant program for nonprofit social and environmental justice groups helping vulnerable communities.

“We’ve got a great program that puts Oregon on track to reduce climate emissions, and for the first time ever, a grant program really specifically for folks that need the most investment from the impact of climate,” said Tony DeFalco, executive director at the Portland-based nonprofit Latino Network. “Now, that’s all in the wings waiting to get going, and we can’t wait another minute.”

Industry lawsuit

The Climate Protection Program was approved in 2021 by the Environmental Quality Commission after more than a year of meetings, presentations from the environmental quality department and public comment.

But in December, Oregon Court of Appeals judges agreed with lawyers representing NW Natural, Avista Corporation and Cascade Natural Gas Corporation, who argued that in the process of imposing state regulations to cap and reduce emissions, the commission failed to submit required disclosures to the companies and to other entities that hold federal industrial air pollution permits. The department was required to issue a written statement about why the state was adopting emission limits that exceeded federal rules, disclose a list of alternatives that were considered and explain why they were not adopted.

The judges ruled the program invalid on that technicality.

Rather than appealing the decision to the Oregon Supreme Court, which would likely not hear the case until mid-2025, state environmental regulators announced that they would start over.

Under the plan, natural gas companies were responsible for at least 26% of emissions reductions to meet state targets. Natural gas is almost entirely methane gas, among the most potent climate-warming greenhouse gases that trap heat in the atmosphere. One-third of global warming is due to human-caused emissions of methane, according to the U.S. Environmental Protection Agency.

David Roy, director of communications for NW Natural, previously told the Capital Chronicle that the company will participate in the repeat rulemaking process.

Community grant program

So will the nonprofit groups that participated in the process in 2021 and were involved in the establishment of the community investment program. The program was just about to get started when the court made its ruling.

In 2023, the environmental quality department chose a Portland-based nonprofit called Seeding Justice to oversee and distribute the grants to nonprofits for various environmental investments, including in solar panels, electric vehicles and weatherizing homes and buildings. Seeding Justice expected to collect up to $150 million per year from the carbon offsets.

The Portland-based environmental justice nonprofit Verde, is among the groups that lost out on the grants and that will participate in the climate protection program’s recreation. Its energy, climate and transportation manager, Cheyenne Holliday, said it’s disappointing to start over.

“We and our community members were really excited and hopeful that we were going to be able to lead the charge,” Holliday said. “We are a little disheartened that we have to actively push for this again.”

She said she will push once again to have the community grants included again in the program.

“Two things we really are hoping to maintain, or even strengthen, is the science-based emission cap trajectory established in the original rules, and an effective, independent Community Climate Investments program that is directly responsive to our community needs,” she said.

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