Critics Blast Oregon’s Efforts to Phase Out Petroleum Diesel and Restrict Farming

A series of climate bills now before the Oregon legislature could devastate rural communities and further fuel inflation, according to detractors. 

The bills would phase out petroleum-based diesel fuel, levy sweeping new taxes on tires and off-road agriculture equipment, and place a moratorium on new and existing dairy and poultry farms, the majority of which are family owned and operated.

The farm moratorium “would magnify the strain on our food supply chain and further drive up costs for milk, chicken, eggs, beef, and pork,” wrote Republican state Rep. Cyrus Javadi, whose district on the northern Oregon coast has a timber, agriculture and dairy-based economy.

“Without diesel, we can’t provide the lumber and materials necessary to meet Governor Kotek’s homeless state of emergency declaration to build 30,000 new homes,” testified Angelita Sanchez before the Committee of Environment and Energy on March 9. Sanchez is co-director of Timber Unity, a natural resources PAC with 60,000 members.

If these policies are enacted, she fears they will create a break in the supply chain while raising the cost of goods and services to astronomical levels.

If It Moves, Tax It!

House Bill 3158, the “Clean Diesel Engine Tax” would levy a suite of new taxes on off-road machinery, such as that used in farming and logging. 

Taxes would apply to sales and rentals of off-road machinery, tires, and the dyed diesel fuel used to power farm and other heavy equipment. 

The bill also includes a “privilege tax” for engaging in the business of providing off-road diesel equipment and heavy duty vehicles. 

The Oregon Farm Bureau (OFB) opposes HB3158 because it taxes “virtually every piece of equipment” that’s used in agriculture, as well as the fuel and tires needed to run it, at a time of rising inflation and other financial stressors. 

It also burdens rural businesses with the cost of retrofitting trucks in the state’s largest metropolitan area, according to OFB. 

Revenues from the tax would transfer to the “Clean Diesel Engine Fund.”

That fund provides grants to retrofit trucks to run on the new “green diesel” or biodiesel, which is required as part of Portland’s plan to phase out the sale of petroleum-based diesel. 

Starting in 2024, petroleum diesel available for sale in Portland will be blended with renewable fuels at increasingly higher increments, until 99 percent of the petroleum content is phased out by 2030. The new blend will be called R99. Keeping one percent maintains federal tax credits for blenders and wholesalers.

Light and medium-duty trucks around Portland must be retrofitted to run the new green blend for owners to be able to renew their title and registration.

Until now, retrofit grants have been covered by $73 million from Volkswagen, which agreed to pay state governments $2.9 billion to resolve litigation over the auto company’s emissions violations.

However, the amount requested for upgrades now surpasses the money Oregon has remaining from that deal. That has lawmakers considering new sources of funding.

“Rural communities are not responsible for Portland’s air quality, but HB 3158 puts that responsibility squarely, and inappropriately, on the backs of our members,” the Farm Bureau said in submitted testimony.

Out With Petroleum-Based Diesel

Oregon’s SB 803 would essentially expand Portland’s petroleum-based diesel phase-out to the rest of the state. 

Portland announced in December 2022 that it would become the first city in the nation to phase out the sale of petroleum-based diesel, calling it the first major step to reduce carbon emissions by 50 percent under the city’s “climate emergency plan.”

Opponents do not want to emulate Portland. 

They claim the transition would raise the cost of fuel to the point it would be financially unsustainable for many farm and ranch families, hitting rural and low-income Oregonians the hardest.

“Petroleum-based Diesel runs 90 percent of commercial activity, including electric charging stations, lithium mining equipment, and the generators that provide emergency power backup to our hospitals,” testified Sanchez.

“Renewable diesel is not ready to replace that source.”

“To make the bio-diesel that Oregon needs each year would take nearly 13.8 million acres of farmland, but the state only has about 16 million acres of tillable soil,” testified Cody White, owner of White’s Hauling and Farm, which operates 40 semi-trucks.

Growing crops such as soybeans for biofuel could also displace food production acreage at a time when food security is a great concern, he explained.

Because Oregon does not produce soybeans, the state would be dependent on bio-diesel from other states. 

With other states enacting similar restrictions on petroleum-based diesel, Oregon would be competing with California, New York, Washington, and Canada to purchase a limited supply of biofuels, Sanchez told The Epoch Times. 

It would also be competing with China, which is the world’s largest soybean importer, accounting for nearly 60 percent of global trade and half of U.S. soybean export value.

“Meanwhile, 30 percent of all diesel rigs already meet emission standards and that number will grow as the market expands,” Sanchez said.

The Future of Farming

Meanwhile Senate Bill 85, the “Relating to Confined Animal Feeding Operations” bill would place a moratorium on new permits for farm operations” with more than 2,500 dairy cows and more than 125,000 chickens

The bill comes in response to a growing number of large operations proposed in the Willamette Valley near the Santiam River and concerns about pollutants and water use. It calls for an eight-year moratorium until the state studies the environmental, social, and public health impacts of such operations.

Nearly 700 environmental advocates, farmers and representatives from industry testified in person or in writing at a March 6 Senate Committee on Natural Resources hearing to express their opposition or support for the bill.

“This legislation would only accelerate the loss of family farms and local food production, killing jobs and businesses. As a result, Oregon would have to rely more on out-of-state livestock products,” Javadi wrote in his testimony.

Farmers with dozens to hundreds of animals shared their concerns about the future of livestock production in the state and its effect on the economy. 

Nearly all raise chickens or cows for meat or milk products. 

Large operators said they were forced to acquire more animals and land to pay for ever more taxes and fees and abide by regulations to compete in an industry controlled by multinational corporations. 

Smaller operators talked about the impact to rural communities when a handful of large operators take over, driving up land prices and consuming limited water resources.

“We have slowly forced agricultural operations to get larger to survive. Yet now we’re here talking about limiting how big a farm can get or how many animals we think are appropriate,” testified Greg Addington, director of the OFB.

Eight lawmakers, including two Democrats in support of the bill and six Republicans opposed, spoke at the hearing. 

State Sen. Suzanne Weber, a Republican, said halting new large operations and expansions for eight years would close many businesses in her district. 

With at least 20 percent of the state’s industrial animal operations in his district, Republican State Sen. Lynn Findley, said the bill would be an economic disaster for his constituents. 

Meanwhile, these bills continue to wend their way through Oregon’s legislature.