The Year Ahead in Energy and Environmental Law: The Pacific Northwest

With money tight, jobs scarce and the future uncertain, cost considerations will drive environmental policy in Washington and Oregon in 2010.

Washington

The State’s projected $2.6 billion budget deficit will take the attention of Washington lawmakers away from environmental legislation in the current session.[1] Environmental groups, acknowledging this fiscal reality, will focus their efforts on simply maintaining the current spending levels for environmental programs.[2]

Still, there will be a few bills vying for legislators’ attention. A bill imposing a $1.50/barrel fee on petroleum products, H.B. 1614 (companion S.B. 5518), has been introduced.[3] The bill’s supporters project that the petroleum fee would raise approximately $120 million per year[4] to fund local capital projects and retrofits aimed at mitigating or preventing petroleum stormwater pollution.

There may also be an effort to amend Initiative 937, imposing conservation and renewable energy standards on electric utilities beginning in 2012.[5] Lawmakers sought to amend the initiative last year by, among other things, broadening the definition of qualifies as an “eligible renewable resource” and the geographical area for obtaining eligible renewable resources and energy credits (S.B. 5840). While last year’s attempt at compromise failed, the looming 2012 deadline suggests there may be further attention given to the issue. Bills introduced so far include H.B. 2432 and H.J.R. 4215 (which seeks to amend Washington’s Constitution to recognize hydropower as a renewable resource).

Bills aimed at harmonizing Washington’s greenhouse gas reporting rule with the federal rule enacted by EPA last year, H.B. 2545 and H.B. 2653, will receive attention. Other environmental bills include S.B. 6248, which would prohibit the use of the use of the chemical bisphenol A in plastic bottles;[6] H.B. 2471, which would expand opportunities for net metering of electricity in Washington State; and H.B. 2481, which authorizes the Department of Natural Resources to lease state lands for biomass development and to enter into forest biomass supply agreements.

Finally, in a move calculated to streamline environmental review and help the state meet its projected budget shortfall, Governor Chris Gregoire recently proposed changes to the way the state manages its natural resources.[7] Gregoire signaled her support for legislation that would: (1) reduce the number of growth management hearings boards from three to one, and reduce the number of environmental appeals boards from five to two; (2) standardize the appeal procedures and timelines for quasi-judicial environmental and land use laws; and (3) eliminate agency review processes that are duplicate of appeals to the environmental hearings boards.[8]

Oregon

A special session of the Oregon legislature is planned for February 2010. The tenor of the proceedings will be determined on January 26, when Oregon voters decide two ballot measures to increase state income and business taxes to fill what will otherwise will be an approximately $800 million budget shortfall.[9] If the measures fail, legislators are likely to spend the session cutting the state’s already heavily trimmed budget, likely impacting at least some of the state’s environmental programs.[10] As in Washington, environmental groups will then focus on retaining programs that are already in place: forestry management is particularly threatened,[11] and budget cuts could impact a number of other resource protection programs.

Whatever the budget situation, the controversial Business Energy Tax Credit (“BETC”)[12] program will likely be on the table. The credit, designed to stimulate Oregon’s clean energy industries,[13] is a victim of its own success, costing the taxpayers many times original estimates. However, while the February session may result in some interim changes to the program, a major overhaul is not expected until 2011.[14]

Other bills worth watching include a proposal to adopt the recommendations of the Metropolitan Planning Organization Greenhouse Gas Emissions Task Force,[15] a bill to ban bisphenol A in food containers for children,[16] and a bill reinstating the recently expired moratorium on offshore drilling in state waters.[17] An initiative has been introduced that, if it makes the November 2010 ballot, would ban gillnets in Oregon waters to protect Salmon;[18] and the Oregon Department of Environmental Quality is set to begin reviewing environmental permitting requirements for Portland General Electric’s proposed gas-fired plant at Boardman.[19]