21THURSDAY, MARCH 11, 2021
BUSINESS & AG
THE OBSERVER & BAKER CITY HERALD — 3B
Oregon businesses are, by and large, still in business
Only 5% of Oregon’s restaurants & bars
gave up their liquor licenses in 2020
BY MIKE ROGOWAY
The Oregonian/Oregon
SALEM — Scores
of beloved Oregon busi-
nesses permanently shut
their doors during the pan-
demic, unable to endure
the prolonged downturn as
safety restrictions limited
business — or customers
simply stayed away.
With COVID-19
cases in steep decline since
mid-January, though, and
government restrictions
easing, there’s reason for
optimism that the pandem-
ic’s ultimate toll on indi-
vidual businesses may
be less severe than many
feared.
Bankruptcies were
actually down last year,
in Oregon and across
the country, despite the
sudden recession. And
just 5% of bars and restau-
rants surrendered their
Oregon liquor licenses in
2020. Only 6% of lottery
retailers — typically bars
— shut down.
Meanwhile, the total
number of businesses reg-
istered with the Oregon
Employment Department
increased in the six months
after the pandemic began
— with an annual growth
rate of 3.9%, a little faster
than the growth rate in
the 12 months before the
pandemic.
What’s going on?
Josh Lehner with the
Oregon Offi ce of Eco-
nomic Analysis notes that
small-business income in
the state was roughly fl at
last year. That’s largely
because of the Paycheck
Protection Program, which
funneled $7 billion in for-
givable loans into those
small businesses.
“Absent the PPP, propri-
etors’ income fell nearly
20%, which is an apoca-
lyptic drop,” Lehner wrote
in a new analysis.
It’s been an excruciating
year for businesses owners
and many are just limping
along, Lehner told law-
makers last month. It may
be some time yet before
people feel safe packing
back into restaurants, bars,
bowling alleys and movie
theaters.
Still, it appears that a
large majority of Oregon
CARBON
to be mindful about the
equity issues of possible
fuel price increases and
how quickly Oregonians
will adopt electric cars.
“What we’re likely to
propose to the (Environ-
mental Quality Commis-
sion) will cover almost all
transportation fuels,” he
said. “There’s no plan to
have any big exemption
for fuel suppliers.”
Continued from Page 1B
and the hundreds of mil-
lions of dollars they would
have generated to reinvest
in carbon reduction, adap-
tation and social justice
programs.
In this program, DEQ
would annually issue pol-
lution permits to entities
whose carbon emissions
exceed an established
threshold, then gradually
ratchet down those annual
allowances to force busi-
nesses to clean up their
act. Some trading of those
permits will be allowed,
and it’s likely that compa-
nies will be able to meet
some portion of their obli-
gation by investing in
projects that reduce emis-
sions, say electric buses,
as an alternative reducing
d their own.
re-
Richard Whitman,
DEQ’s director, says
u- that in many ways, it’s
apps a cleaner approach, not
, subject to the same kind
og of lobbying and horse
trading that repeatedly
s
watered down lawmakers’
nd proposal. He says the
dis- Environmental Quality
Commission, a fi ve-
member citizen’s panel,
so has the ultimate authority
to set the rules.
the
“We’re doing this much
more intentionally than
the Legislature was able
ing to do,” he said. “This is
-
not a vote. We are not
looking for a decision
ch- from the (advisory com-
ise, mittee). They’re on there
to give us their expertise
ll and opinions.”
it.
But this process will
ting hardly be divorced from
politics. Business groups
are already suing the state
to overturn the governor’s
rget executive order, which
may provide them with
negotiating leverage. All
sides will be lobbying the
ol- Environmental Quality
nal Commission on numerous
Nerd- issues, including who gets
vides to fi ll open positions on
iated the panel.
ss. Whitman acknowl-
edges that the process
makes some groups
uncomfortable. “There’s
going to be more noise
going forward.”
Electricity sector
A big gap in this pro-
gram, one that DEQ
acknowledges up front,
is that greenhouse emis-
sions from electric util-
ities would not be reg-
ulated. It’s a big hole,
as emissions of carbon
dioxide and equivalents
from burning natural gas
for electricity accounts
for about half of emis-
sions from stationary
sources statewide — most
of it from plants owned
by Portland General
Electric.
The problem is that
a big chunk of Oregon’s
businesses have held up
over the past year and for
most, the worst may be
behind them now.
“The fact that entre-
preneurship has remained
so strong means the total
number of businesses in
the economy will con-
tinue to increase,” Lehner
wrote. “Replacing the eco-
nomic role of the lost fi rms
takes time as does fi nding
a job at a different fi rm for
the laid-off workers, but
this process is underway.”
How far, how fast
Sierra Dawn McClain/Capital Press, File
Loggers, farmers and others protest in front of the Oregon Capitol on June 26, 2019, to oppose a greenhouse gas re-
duction plan they say would cripple the economy and way of life for rural Oregonians. Plans to implement Gov. Kate
Brown’s executive order for state agencies to regulate greenhouse gas emissions now are taking shape during the 2021
Legislature.
electricity supply still
comes from out of state
sources, much of it from
coal plants, and DEQ
only has the authority to
regulate in-state emis-
sions. If it were to impose
emission limits on
in-state gas plants, utili-
ties might simply import
more power from out of
state, much of it dirtier
coal, a problem referred
to as leakage.
There are bills in
the Legislature, such as
House Bill 2995, that
would force electric util-
ities to supply customers
with 100% clean elec-
tricity by 2035 and accel-
erate the existing dead-
line to transition off
coal from 2030 to 2025.
That’s an aggressive goal,
and may be particularly
onerous for Pacifi Corp,
which still gets a signif-
icant chunk of its elec-
tricity supply from coal,
and is a co-owner of a
gas fi red power plant in
Oregon.
PGE, meanwhile has
an existing “net zero”
plan that pledges to
reduce its greenhouse
emissions by 80% by
2030, and an aspirational
goal for zero greenhouse
gas emissions by 2040.
That glidepath is more
aggressive than the state-
wide carbon reduction
goals, though it remains
to be seen if its achiev-
able. The company still
has an ownership stake in
a Montana coal plant and
operates four of the seven
big gas fi red power plants
in the state.
It’s not clear if any of
the proposed legislation
will pass, which would
leave both imported and
in-state electricity exempt
from emission limits.
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“Ideally all electricity
emissions would be cov-
ered,” Baker said, but the
plan should at least cover
new plants in Oregon,
making it harder to site
them here. “We know
from the climate math
and science that we can’t
be building news gas
plants.”
Whitman agrees that
deep decarbonization of
the electrical grid is nec-
essary for the state to
hits its targets. But “it’s
not something we can do
without legislation. We
have to work within our
existing authorities.”
Natural gas and
petroleum
For natural gas com-
panies in particular,
the program may pose
an existential threat to
their business model as
it incentivizes commer-
cial and residential cus-
tomers to move away from
gas heating and cooking,
and pushes gas utilities
and suppliers to transi-
tion faster to so-called
renewable natural gas and
hydrogen energy.
Nels Johnson, gov-
ernment affairs manager
for NW Natural, says the
company has a plan to do
just that by 2050. It was
on board with the last ver-
sion of the cap and invest
legislation, and felt the
Legislature was the appro-
priate venue to work out
the details of the program.
The utility’s chief con-
cern with the new pro-
gram is the cost of com-
plying, in part because
Oregon’s program won’t
be linked to California’s,
as it would have been
under the cap and invest
program. It also won’t
be generating huge sums
of money every year to
invest in carbon reduction
projects within Oregon’s
borders. Both would have
generated a larger supply
of alternative projects to
invest in, and cheaper
carbon offsets that could
be used to satisfy the
state’s emission reduction
targets while it makes that
transition.
The DEQ is consid-
ering scenarios that would
allow companies to meet
up to a quarter of their
pollution reduction obliga-
tions by investing in such
projects. But DEQ wants
them to deliver benefi ts
on the ground in Oregon,
such as electric car
charging infrastructure,
electric buses, or high
effi ciency heat pumps for
low-income residents.
Johnson said the supply
of such projects is likely
to be far more limited in
Oregon, and the offsets
more expensive.
“Do we want to do
it the expensive way
or cost-effective way,”
Johnson asked. “Our hope
is that the EQC will says
let’s do this in a cost-ef-
fective way, and that’s the
lens they’ll look at these
rules through.”
Brad Reed, a
spokesman for Renew
Oregon, says using off-
sets from alternative proj-
ects should be strictly
limited unless companies
can prove the projects are
really eliminating green-
house emissions.
“That’s the point of the
whole program,” he said.
“The fear is that compa-
nies are allowed to con-
tinue business as usual
by trading things around.
Overall, the future has to
be primarily gas free to
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have any shot at meeting
these goals.”
The majority of Ore-
gon’s greenhouse emis-
sions come from the trans-
portation sector. Fuel
suppliers and truckers are
among those suing the
state to overturn the gov-
ernor’s executive order
as unconstitutional. They
are also members of the
rulemaking advisory
committee.
One open question is
how high the minimum
emission threshold will
be set for regulating fuel
companies. Under the cap
and invest legislation,
it was all fuel suppliers
with annual emissions of
carbon dioxide equiva-
lents greater than 25,000
metric tons.
Under one scenario
the DEQ is considering,
the level could be as high
as 300,000 metric tons.
That would capture large
fuel suppliers, and 86%
of related emissions, and
make the program easier
to administer. But envi-
ronmental groups say that
would still let some 80
companies and 14% of the
emissions off the hook, and
would open up the pos-
sibility of oil companies
gaming the system by rejig-
gering their distribution.
Whitman insists that
won’t be the case, though
he says the agency needs
Another area of con-
tention is where the
commission will set
the overall and interim
emission reduction tar-
gets; in effect, how fast
and how far it lowers the
boom on greenhouse pol-
lution. The science is
clear: Reductions need to
come quickly to avoid the
worst impacts of global
warming.
The DEQ is modeling
three different scenarios,
one that matches the tar-
gets in the governor’s
executive order, one more
aggressive and one less.
But each of those sce-
narios also tweaks which
sectors would be regulated
or exempted, whether
entities could trade their
emission permits, and how
much of their compliance
obligation could be satis-
fi ed by investing in alter-
native projects.
Environmental groups
are adamant: The caps
should be as aggressive
as possible, but clearly no
weaker than the goals the
governor has already laid
out.
Kristen Sheeran, the
governor’s climate and
energy carbon policy
adviser, says the goals
in the governor’s execu-
tive order were just that,
goalposts for emission
reductions across Ore-
gon’s economy. No one
program, she said, was
intended to carry the
whole load.
State agencies and
commissions are working
on rules to achieve those
targets. The state’s renew-
able portfolio standard is
pushing utilities to tran-
sition to wind and solar.
Its clean fuels program
is generating emission
reductions in the trans-
portation sector. She said
all those measures will
act in tandem with DEQ’s
carbon reduction plan.
“It’s a toolbox
approach,” she said.
“DEQ is working on
one of those tools.”
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