OBI Commissions ECONorthwest Report on State of Manufacturing in Oregon |
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OBI is looking forward to the November release of a new report from ECONorthwest on the state of manufacturing in Oregon. While the report is not expected to be finalized until next month, draft findings from ECONorthwest’s research have highlighted the importance of U.S. manufacturing during the pandemic and its related recession.
Key findings from the draft report include:
- Production and employment growth in Oregon’s manufacturing sector has outpaced the U.S. average
- Manufacturing contributed a very significant portion of the state’s GDP in 2020
- Most manufacturing jobs are found in four sectors: high-tech and electronics; wood products; food and beverage; and metals, transportation, and other advanced manufacturing
- Median earnings of manufacturing workers are significantly higher than median earnings of full-time workers in other industries
- Manufacturing jobs help lift households out of poverty
A broader list of the report’s more detailed findings will be released in November with the full report.
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Climate Protection Program |
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The public comment period on Department of Environmental Quality’s proposed Climate Protection Program ended Monday. This climate proposal is in response to Governor Brown’s Executive Order 20-04 to reduce greenhouse gas emissions in Oregon and is one of the most – if not the most – sweeping and impactful regulatory schemes ever proposed in Oregon. The proposal will have broad economic consequences for all Oregonians through significant increased costs for energy and transportation fuel that will produce a ripple effect throughout our economy.
OBI submitted extensive comments on the proposal and participated heavily in the development of the policy over the last year and a half. We have grave concerns with many provisions in the proposed rule including DEQ’s wholly inadequate fiscal impact analysis of the proposal. OBI collaborated with several business groups in requesting an independent analysis of the economic impacts of the proposed regulation, which showed:
- 121,570 jobs lost as compared to DEQ’s predicted 19,700 jobs gained
- A drop of $6.4 billion in state income, hitting middle income families hardest
- A reduction of $9.8 billion in gross state product compared to DEQ’s predicted net increase of $1.7 billion
- Significant price increases impacting consumers for energy and transportation fuels
These economic impacts are the result of the program’s structure that prioritized greenhouse gas reductions and air quality improvements, but failed to build in mechanisms found in other regulatory programs that control costs to protect businesses and consumers. Without adequate compliance pathways and cost controls built into the program, fuel suppliers’ only option to comply with the program could be to restrict the volume of fuel delivered in Oregon, which could cause sudden and steep price shocks.
OBI is also concerned that the policies framework may fail to produce real, global greenhouse gas reductions and drive Oregon businesses from the state. In the coming weeks, DEQ will be evaluating public comments received and we expect the policy to be presented to the Environmental Quality Commission for adoption by mid-December.
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Monday, the City of Portland’s Bureau of Planning and Sustainability (BPS) issued a proposal – modified from their original November 2020 proposal – for taxing stationary sources to reduce greenhouse gas emissions and improve air quality within the city limits. For now, BPS is shelving the carbon tax and focusing on the Clean Air Protection Fee, though we fully anticipate a modified carbon tax proposal at some point in the future.
The tax proposal includes a $20,000 annual base fee for all facilities with Title V and Simple and Standard Air Contaminant Discharge Permits. On top of the annual fee, Title V permittees would be charged $250/ton for criteria pollutant emissions. There are many brazen elements of the proposal, including:
- A tax on top of the already substantial permit fees paid by stationary sources, including manufacturing facilities, to DEQ to obtain required permits. The City of Portland does not have any regulatory authority over these permit holders and this is simply a tax to raise revenue.
- The amounts proposed by the city are actually much higher than the fees stationary sources already pay annually to DEQ for permits. For example, a facility with a DEQ “Simple” permit pays DEQ between $3917 and $7834 per year in order to operate. The city’s tax proposal would require the same facilities in this permit category to pay $20,000 per year in addition to DEQ permit fees to fund the city's air quality program.
- Per ton emissions fees on DEQ Title V permits are assessed at $64.18/ton for criteria pollutants, while the city proposes to collect $250/ton for the same emissions.
- The proposal is extremely focused on addressing air quality issues that have little to no relationship to air emissions from facilities. The city's proposal emphasizes reducing particulate matter from woodsmoke and diesel, planting trees to increase shade during extreme heat events, and helping residents purchase cooling and filtration systems. It also lists a vague objective of “supporting Oregon Department of Environmental Quality on state regulatory programs and rulemaking.”
BPS will accept public comments through November 19 at noon. OBI is extremely concerned with the proposal and will be discussing it with affected members and our committees to determine a response. In addition to our serious concerns with the Portland air quality emissions tax, we worry that this proposal, if implemented, is likely to be mimicked by other local jurisdictions as a revenue source.
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DEQ Initiate Major Changes to Air Permitting Program |
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The Department of Environmental Quality will soon initiate rulemaking on its air permitting program in which we expect DEQ to propose extremely foundational and concerning changes to the existing air program. Timing for when the rulemaking will begin is in flux, but our best estimate is that the first meeting will take place shortly before or after Thanksgiving. DEQ plans to issue the rule package for public comment in May 2022, so the effort is on a very fast timeline.
In conversations with DEQ, we have learned that creating more stringent rules related to the construction of small projects, shortening the time available for facilities to respond to DEQ, significantly increasing the complexity of permit renewals, imposing air quality modeling requirements on existing sources, eliminating generic plant site emission limits (PSELs), and imposing Best Available Technology for minor sources, are just some of the issues DEQ intends to address in the rulemaking. No information about the rulemaking is available on DEQ’s website.
In short, we expect the rulemaking to complicate an already complex and stringent air quality permitting program. OBI has been invited to serve on the Rules Advisory Committee, however, given the technical and legal expertise this rulemaking will demand, it is likely that we will engage expertise to serve on our behalf. Please contact Sharla Moffett if you are interested in more information about this effort.
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Thank You for Joining Manufacturing Day! |
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Thank you to everyone who joined us for our annual celebration of Manufacturing Day. We enjoyed the opportunity to virtually celebrate Oregon’s thriving manufacturing sector and the critical role these businesses play in our state’s economy and way of life.
For those who were unable to join the live event, below you will find a few highlights from this year’s celebration
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Join the Manufacturing Council of Oregon! |
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OBI recently announced the formation of the Manufacturing Council of Oregon (MCO), the state affiliate of the National Association of Manufacturers. MCO is OBI’s dedicated manufacturing advocacy platform and steering committee and will be a strong voice of our manufacturing and related industries. MCO’s mission is to protect, promote and grow a positive, globally competitive business climate for manufacturing in Oregon.
If you’re interested in joining the Manufacturing Council of Oregon, we encourage you to log in to your OBI membership profile, or create a profile if you don’t have one set up, go to the settings tab, and in your Groups/Interest areas click on “OBI Manufacturing Council of Oregon” to be added.
Visit our website for more information on the council or reach out to Scott Bruun with additional questions.
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Are you taking full advantage of your OBI membership? |
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Oregon Business & Industry
1149 Court Street NE
Salem, OR 97301
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