Department of Environmental Quality

Interstate Technology Regulatory Council Emerging Issues Workshop October 28, 2009 Control of Greenhouse Gas Emissions in Oregon

Dick Pedersen Director, Oregon DEQ Department of Environmental Quality

PresentationPresentation OutlineOutline

¾¾ClimateClimate changechange actionaction inin OregonOregon •• BriefBrief historyhistory •• 20072007 LegislativeLegislative sessionsession ¾¾OregonOregon’’ss participationparticipation inin thethe WesternWestern ClimateClimate InitiativeInitiative (est.(est. 2007)2007) ¾¾20092009 OregonOregon LegislativeLegislative sessionsession ¾¾NewNew Directions:Directions: LifeLife--CycleCycle AnalysisAnalysis Department of Environmental Quality

FightingFighting ClimateClimate ChangeChange inin Oregon:Oregon: AA BriefBrief HistoryHistory

Landmark GHG Reduction Measures: 1997: CO2 emission standard offsets 2005: Clean tailpipe standards

Governor’s Task Force Reports: 2004: “Oregon Strategy for Greenhouse Gas Reductions” 2008: “Framework for Addressing Rapid Climate Change” Department of Environmental Quality

20072007 OregonOregon GHGGHG LegislationLegislation

• Renewable Portfolio Standard • Renewable Fuels Standards • Biomass & biofuels tax credit • Energy efficiency tax credits expanded • State Global Warming Commission • State GHG Reduction Goals Department of Environmental Quality

OregonOregon GHGGHG ReductionReduction GoalsGoals Department of Environmental Quality

OregonOregon GHGGHG ReportingReporting RulesRules

•• AdoptedAdopted 20082008 •• AnnualAnnual ReportingReporting •• EmissionsEmissions ReportingReporting Threshold:Threshold: 25002500 metricmetric tonstons ofof CO2eCO2e perper yearyear •• EmissionsEmissions ofof 66 majormajor GHGsGHGs Department of Environmental Quality GHGGHG ReportingReporting PhasePhase--InIn 20102010 Reporters:Reporters: BusinessesBusinesses withwith airair qualityquality permitspermits – Title V Permits – Subset of ACDPs

20112011 Reporters:Reporters: BusinessesBusinesses withoutwithout airair qualityquality permitspermits – Wastewater treatment – Landfills – Electric generating units, and – Electricity & natural gas transmission and distribution lines Department of Environmental Quality 20092009 LegislatureLegislature ExpandedExpanded ReportingReporting AuthorityAuthority

• Added electricity importers and fuel suppliers • Currently in rulemaking process

Oregon GHG Emissions by Sector Data source: Oregon Department of Energy, Graph by Oregon DEQ Department of Environmental Quality

WCI:WCI: OverviewOverview

• Establishedstablished 2007,2007, MOUMOU betweenbetween WesternWestern governorsgovernors •• OregonOregon aa foundingfounding membermember •• PublishedPublished designdesign recommendationsrecommendations inin SeptemberSeptember 20082008 This slide from Dick Pedersen was added after the meeting. “There were questions during my presentation about how much GHG emissions where coming from WCI jurisdictions. The questions were related to the impact of reducing GHG emissions through product management relative to overall emission. The reality is that is quite low probably far below 10%. The States and Province shown in blue are observers of WCI and not included in the table. “ Department of Environmental Quality

WCIWCI ProgramProgram ElementsElements

• Covers electric generation & industry (2012) and transportation & heating fuels (2015) • Goal: reduce emissions15% below 2005 by 2020 • Auctions: minimum 10% of allowances, increasing to 25% in 2020 • Offsets limited to 49% of entity’s reductions • Auction revenue for consumer protection, adaptation Department of Environmental Quality

WhatWhat doesdoes itit meanmean forfor OregonOregon toto bebe partpart ofof WCI?WCI?

• State agency staff participate in technical and policy committees • Legislation needed to establish a state program • Components that need to harmonize with WCI design: • Reporting requirements • Sectors covered • Basic framework: compliance periods, auctions, offset criteria • Participate in regional organization • Linkages to other states Department of Environmental Quality

RegionalRegional CollaborationsCollaborations

Regional Greenhouse Gas Initiative (and observers) Western Climate Initiative (and observers)

Midwest Greenhouse Gas Reduction Accord (and observers) 12 Department of Environmental Quality

KeyKey ProvisionsProvisions ofof RGGIRGGI && MGGAMGGA

• First auction Sept. 2008 • Draft recommendations June 2009 • Electric generation only • Electric generation, industry, transportation and heating fuels • Nearly all allowances • Hybrid distribution: auctioned auctions, freefree andand feefee • Proceeds used by • Proceeds for easing & states for energy accelerating transition efficiency to low carbon economy Department of Environmental Quality

20092009 OregonOregon GHGGHG LegislationLegislation

• Expanded greenhouse gas reporting • Established a low-carbon fuel standard • Strengthened green building codes • Ensured no new conventional coal power • Provided energy efficiency financing • Created pilot solar feed-in tariff • Implemented biodiesel blending requirement Department of Environmental Quality

LowLow CarbonCarbon FuelFuel StandardStandard

•• ReduceReduce averageaverage carboncarbon intensityintensity ofof fuelsfuels overover timetime

•• AvoidAvoid pickingpicking winnerswinners

•• FlexibleFlexible implementationimplementation Department of Environmental Quality

HowHow doesdoes aa LowLow CarbonCarbon FuelFuel StandardStandard work?work?

• Set baseline standard equal to carbon intensity of 2010 gasoline and diesel

• Providers of fuels must achieve standard, averaged across all fuel they sell

• 10 percent reduction from 2010 to 2020

• Required reductions are gradual, weighted toward later compliance years Department of Environmental Quality

FuelFuel LifecycleLifecycle -- GasolineGasoline

7 g/MJ 14 g/MJ 73 g/MJ Oil Well Refinery Vehicle 1 g/MJ 1 g/MJ Transportation Transportation

Gasoline

Source: California Air 96 g/MJ Resources Board estimates for California fuels Department of Environmental Quality

FuelFuel LifecycleLifecycle –– CornCorn EthanolEthanol

36 g/MJ 38 g/MJ 0 g/MJ Corn Field Bio-Refinery Vehicle 2 g/MJ 3 g/MJ

Transportation Transportation

30 g/MJ -12 g/MJ Land Use Change Corn Ethanol 97 g/MJ Source: California Air Resources Board estimates for California fuels Co-products Department of Environmental Quality

ImpactImpact onon FuelsFuels

• Increase use of: – Low carbon corn or sugarcane ethanol – Cellulosic ethanol – Renewable diesel and biodiesel – Electricity, hydrogen and natural gas

• Decrease the use of: – Petroleum – High carbon biofuels Department of Environmental Quality

NewNew Directions:Directions: ApplicationApplication ofof LifeLife--cyclecycle AnalysisAnalysis

• DEQ’s Solid Waste program is pursuing several projects as part of Oregon’s State Waste Prevention Strategy

• Applying life-cycle analysis in creative ways that will help Oregonians make informed decisions Department of Environmental Quality

ExampleExample #1#1 ConsumptionConsumption BasedBased EmissionsEmissions InventoryInventory

•• ProductionProduction--basedbased inventory:inventory: basedbased uponupon geographicgeographic perspective,perspective, i.e.i.e. wherewhere emissionsemissions areare producedproduced •• ConsumptionConsumption--basedbased inventory:inventory: estimatesestimates GHGGHG emissionsemissions fromfrom consumptionconsumption byby OregoniansOregonians ofof goodsgoods andand services,services, regardlessregardless ofof wherewhere theythey werewere producedproduced •• TwoTwo inventoriesinventories complementcomplement eacheach otherother Department of Environmental Quality

ProductionProduction vs.vs. Consumption:Consumption: ComparisonComparison

Oregon 2005 GHG Consumption categories Emissions (MMT CO2e) • Appliances • Clothing • Construction Geographic (in-state) 54 • Electronics • Food and Beverages • Fuel and Utilities Geographic including 70 • Healthcare net electric imports • Media • Services Consumption based 81 • Transportation Services (preliminary) • Vehicles and Parts Department of Environmental Quality

DesiredDesired OutcomesOutcomes ofof ProjectProject

Ultimate Goal = To provide information that helps DEQ, Oregonians, and others take effective actions to reduce emissions – Enable state agencies to identify and evaluate effective policies and programs – Enable Oregonians to reduce their contributions to climate change – Enable businesses to reduce emissions in their production processes and supply chains – Avoid negative “rebound” effects Department of Environmental Quality

ExampleExample #2#2 ResidentialResidential Buildings:Buildings: AnAn EvaluationEvaluation ofof WasteWaste PreventionPrevention PracticesPractices UsingUsing LifecycleLifecycle AnalysisAnalysis

• ConstructionConstruction && demolitiondemolition debrisdebris makemake upup 2020--30%30% ofof OregonOregon’’ss wastewaste

•• OperatioOperationn ofof buildings,buildings, manufacturemanufacture ofof constructionconstruction materialsmaterials havehave significantsignificant environmentalenvironmental impactimpact Department of Environmental Quality

BaseBase Case:Case: AverageAverage NewNew HomeHome inin OregonOregon

• 2262 sq.ft • 3 bedrooms, 2 baths • 2 car garage • Stem wall foundation • Post and Beam floor system • 16 inch stud spacing • Vinyl windows • Asphalt roof • Gas furnace, no A/C • Designed to 2008 Oregon energy code • Energy use modeled for Portland, OR climate Department of Environmental Quality

PracticesPractices withwith LargestLargest GHGGHG ReductionReduction BenefitBenefit

• Smaller Homes • Dematerializing and Design for • Multifamily Housing Simplicity • Design using Salvaged Materials • Adaptability: Reduced Remodeling • Strawbale w/ timber frame • Advanced Floor Framing • Insulating Concrete Forms • Intermediate Framing • Structural Insulated Panels • Offsite Prefabricated Components • Durable roofing, siding and flooring • Homeowner Maintenance Training • Adaptability: Utility Chase • Proper Installation • Deconstruction • Flashing and Rain-screening • Advanced Framing (w/ drywall clips) • Reusable Packaging • Adaptability: Design for Disassembly • Reduced Packaging • Restoration • Detailed Framing Cut List • Single-story Homes • Thermal Curtains Department of Environmental Quality

ForFor moremore information,information, pleaseplease visitvisit OregonOregon DEQDEQ’’ss website:website: www.oregon.govwww.oregon.gov/DEQ//DEQ/