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Originally published June 6, 2017 by Portland Tribune

Oregon’s controversial Clean Fuels Program is fueling growth at the state’s only biodiesel manufacturer.

SeQuential, which is based in Portland and operates a biodiesel production facility in Salem, hired 100 new employees since the legislation took effect in January 2016. That brings the company to about 250 employees.

It’s a labor-intensive business creating biodiesel from used cooking oil, says company co-founder and CEO Tyson Keever.

More truck drivers were needed to drive between SeQuential’s 10 West Coast hubs, collecting used cooking oil and transporting it to SeQuential’s Salem plant. There it is turned into biodiesel, a renewable, clean-burning diesel replacement. More plant operators and office staff also were hired to keep up with demand.

“Ours is 85 percent better than petroleum diesel in terms of a low-carbon profile,” Keever says. “And it’s available today for any diesel vehicles on the road.”

Oregon’s Clean Fuels Program, which took effect Jan. 1, 2016, requires a 10 percent reduction in total carbon emissions from gasoline and diesel fuels over a 10-year period.

During the program’s first year, SeQuential’s cooking oil collection doubled from 3.5 million gallons in 2015 to 7 million. SeQuential also added 1 million gallons of production capacity to its plant last year. The plant produced 8 million gallons of biodiesel in 2016, and expects to produce 8.5 million gallons this year and 10 million in 2018.

Clean Fuels Program supporters tout its environmental and financial benefits. Oregon’s transportation sector emits nearly 40 percent of the state’s greenhouse gases. The goal is to reduce those emissions 10 percent through 2025, Keever said.

That would bring a 4 percent reduction in the state’s carbon emissions, but the 10-year ramp-up period is expected to promote a wave of innovative new fuel technologies, businesses, and investments. That likely will put the clean fuel industry in position to achieve more dramatic carbon reductions in subsequent years.

Oil companies aren’t buying it

Critics, led by out-of-state oil companies, worried the program would drive up prices, and they questioned whether enough alternative fuels would be available.

“Oregon’s Clean Fuels Program is off to a rocky start and it’ll take a complete overhaul to ensure there’s not an undue financial burden on the business community, municipalities, and those who are dependent on fuel,” said Catherine Reheis-Boyd, president of the Western States Petroleum Association, an oil company trade group. “Last year, the program generated only 50 percent of the credits that DEQ (the Department of Environmental Quality) forecasted it would need,” Reheis-Boyd said, “and is anticipated to contribute to only a 1 percent reduction of the total greenhouse gas emissions in the state.”

The Union of Concerned Scientists, in a blog post titled “Oregon’s Clean Fuels Program Off to a Great Start,” has a different take. “For the first three quarters, credit generation (from selling fuels cleaner than the target) significantly exceeded deficit generation,” the organization wrote on its website. “This means that regulated parties are entering the next year with a buffer of banked credits they can use later if necessary.”

The Oregon Environmental Council also hailed the program’s first year as a success. “In its first three quarters, clean fuels has displaced more than 589,000 tons of climate pollution — that’s 30 percent more than required by the program,” according to a post on its website.

Keever, SeQuential’s CEO, says the Clean Fuels Program is market-based so it isn’t choosing “winners or losers” from among contending technologies. “It incentivizes the lowest-carbon fuels possible regardless of how that comes about.”

Fuel companies can choose from a variety of ways to meet the standard, such as accommodating electric vehicles or using trucks powered by compressed natural gas. Companies that don’t choose to supply lower-carbon fuels can buy credits from companies that produce them, like SeQuential.

The program should keep some of the $6 billion spent a year on gasoline and diesel in Oregon. None of that traditional fuel is produced in state.

The majority of money spent at one of SeQuential’s 85 biodiesel pumps across the Northwest stays in Oregon, Keever says. The company also has two refueling stations in Eugene that boast three biodiesel blends, two kinds of bioethanol for gasoline-powered vehicles and “really good sandwiches,” Keever says, a nod to the station’s natural markets offering wholesome food to fuel travelers and local shoppers alike.

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