Low-Carbon Fuel Mandate Could Suck Profits from Oregon Small Businesses

Date: October 04, 2016 Last Edit: October 06, 2016

Worsening the situation, much of Oregon’s ethanol and biodiesel-blended gas comes from out of state.

Low-Carbon Fuel Mandate Could Suck Profits from Oregon Small Businesses

Oregon’s low-carbon fuels mandate, the Clean Fuels Program, has been in effect for six months, and already, small businesses are feeling repercussions from the legislation.

First off, much of the ethanol and biodiesel that’s been blended into gasoline has come from out of state. Currently, Oregon has only one commercial ethanol production plant and one commercial biodiesel plant. While supporters saw the mandate as an opportunity for job expansion in that industry, what opponents feared seems to be coming true—that ethanol prices have fallen, making it difficult for biofuel companies to turn a profit. New biofuel companies considering entering Oregon are therefore waiting to see if the Clean Fuels Program will continue.

“It’s good for consumers,” Sen. Lee Beyer (D-Springfield) told the Oregonian. “It’s not necessarily good if you’re trying to start a new business.”

But the concern isn’t all about starting a new business—it’s about trying to keep current businesses from going under. According to an Oregonians for Sound Fuel Policy issue paper, there could be between 9,000 and 29,000 fewer net jobs in Oregon by 2022 as small businesses would be forced to delay hiring and reduce other costs because of increased fuel costs that are expected due to the low-carbon fuel standard. Other companies might simply be scared away from the state.

In 2017, a major transportation funding package is expected to be a top priority for the legislature. Unless the low-carbon fuel standard find itself back on the chopping block or an influx of biofuel producing companies open new operations in the state, Oregon’s supply of ethanol and biodiesel is likely to continue to come from out of state producers.

“With a major transportation package likely to be a key issue of debate during the 2017 legislative session, it’s depressing to think about the fact that Oregon taxpayers are subsidizing the Midwest’s ethanol industry,” said NFIB Oregon State Director Anthony Smith. “For Oregon’s small businesses, this hits hard on three levels—when filling up at the pump, when seeing increased costs from wholesalers and distributors, and then again at tax time.”

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