News

2011 PIELC- Panel on Sustainability and Legal Practice

I just returned from spending the morning in Eugene, Oregon at the 39th Annual PIELC conference (aka Land Air Water Conference) where I moderated a panel entitled, "Practicing with New Meaning: How Sustainability is Transforming the Law."  This proved to be a most enjoyable opportunity, in no small measure due to the active discussion among the panelists, Chad Marriott, Diane Henkels, Susan Sokol-Blosser and Jon Kroman.  I will provide a link to the actual presentation audio when it is released. 

In short, we considered the impact of sustainability to date on legal practice using the perspectives of the large firm associate, the solo practitioner and the actual business client (Sokol Blosser Winery) and how sustainability is or should be infused into the attorney-client relationship.  Among the lingering thoughts are how difficult it is for attorneys to necessarily impose a value upon a client unless they have credibility and can show added value to the client derived from a sustainable solution to a particular business problem.  Clients, in turn, want their attorneys to be first and foremost competent legal practitioners but secondarily have a personal and professional awareness of the value of sustainability.  Going forward, attorneys cannot be purists.  As Jon Kroman said, he did not go to Divinity School, he went to law school and he assesses progress through tangible metrics.  In the end, the attorney may need to make difficult decisions in accepting representation of clients whose actions cut across the grain of this value; the choice is the attorney's to make.  However, while these may seem complex, difficult choices, the bright side is the energy and passion toward legal practice that sustainability creates.  When what you do matters, and you have power to exert some measure of control for the good, then legal practice reaches its highest aspirations- and achieves new meaning for many of us.

Here are the questions for you to consider:

Is there such a thing as sustainability law?

What are the primary challenges preventing its widespread acceptance within the legal community?

In what way should sustainability be part of the attorney-client relationship? Does it impact the attorney's ethical obligations? How?

How do prospective clients screen attorneys for this value?

How do attorneys develop an actual practice that integrates this value? Is there a model to follow out there? 

In many ways this is a grand experiment with an uncertain future.  Perhaps it will lead to a modified ethical obligation to advise clients in a manner that considers impacts upon future generations?  Perhaps it will become diffuse and only a personal value statement.  I am betting that as more lawyers grapple with these questions, we will creatively resolve these issues in favor of more formal recognition within various practice areas and in how we guide our clients.

A Governor's Legacy

Few people have an opportunity to make an impact beyond their immediate family, circle of friends, and, perhaps, if truly lucky, their community.  Rare is even the politician who can point to their political record as having made more than a few headlines in the local newspaper (or the Huffington Report) before being supplanted by the latest news of Dancing with the Stars. 

I have not had the pleasure of meeting soon to depart Governor Kulongoski, however, I commend him for his capacity to see the need for Oregon to change its ways and, in turn, what this means for the rest of the country.  I'm sure Tom McCall did not plan on becoming a visionary national figure when he pushed the bottle bill into reality, for no one can predict the future for themselves.  However, this present Governor of Oregon deserves special recognition in an area that my modest crystal ball suggests will have far ranging impact- the electrification of our transportation sector.  I do not merely refer to EVs, or individual car use, but the changeover of freight, bus and bikes, to battery-based propulsion.  The most recent incarnation of his vision is in the form of Executive Order 10-09 which created TEEC, the Transportation Electrification Executive Council.  TEEC has been empowered with developing a work plan on how Oregon can become a leader in the new emerging electric vehicle technologies along with strategies for their deployment.  TEEC has already had two meetings and focused on how to gain strong public support for adoption of these technologies, identifying what is the necessary and appropriate charging infrastructure, how best to streamline the regulatory process and how to grow vehicle support infrastrature. 

Although the order expires in August 2011,  Governor Kulongoski's vision won't.   In the end, Governor Kulongoski's legacy will be built on the success of all us seeing how this new technolgy can create jobs and a cleaner environment for future generations. 

Where are the Renewables?

If you haven't had the opportunity, and you are interested in NW energy issues, you should become acquainted with the Newsweekly, "Clearing Up", Executive Editor, Mark Ohrenschall.  In the latest issue, he points out, quite elegantly, that there is a disconnect, intentional or otherwise, in the planning and development of large scale renewables between the wet and dry sides of Oregon and Washington.  Despite the much lauded, and deservedly so, accomplishments of both states in promoting large generation renewable facilities, they remain physically located far from the population bases.  This leads to several potential issues, some more a matter of perception, but isn't perception reality?

The first is NIMBY-ism.  We love it.  Just don't build it right next door.  Is this valid?  Large scale wind, like many renewables, requires careful siting and long-planning horizons.  Solar has only recently begun to break into large scale, commercial production.  Like wind, geothermal also requires careful siting and not readily available at this point outside of certain geologic formations, such as Central Oregon. While we all must emphasize regional strengths when planning and integrating renewables into the generation mix, it is both ironic and odd that the west side appears not to have particular strengths in these more developed forms of renewables.

Second, we lose out on the economic development large scale production can bring, whether in the form of jobs or taxes.  

Perhaps most importantly, we miss an opportunity to educate the public on how renewable energy sources can peacefully co-exist within urban, densely crowded areas.  

Why then do we not have large scale renewable generation in our backyard? 

Energy- The New Plastics

Perhaps the most famous line from the movie "The Graduate" was muttered by a half in the bag businessman, Mr. McGuire, to Dustin Hoffman's character, Benjamin, a young man, who, like all young men, is assumed to be filled with ambition but needing direction. Just one word, Benjamin,  "Energy". 

Having just come off the high of a great green business symposium, sponsored by the University of Oregon's Law and Business schools, titled, Green Behind the Scenes, I keep returning to the thought that energy will be the new linchpin for most of the new technologies being trumpeted.  The issues and the timeframe for their accomplishment, if we are to hold carbon levels below 450 ppm, all seem so daunting.  Yet, the technologies coming on line suggest that we will have the tools to integrate energy consciousness into our daily lives if we can properly construct incentives for utilities to evolve a new business plan that grows renewable energy projects, promotes energy efficiency, solicits distributed energy sources and harnesses consumer behavior through demand response.  While I am wary of the flavor of the month approach, I do believe that the infusion of IT capability and creativity into the grid- aka smart grid- will redefine how we visualize energy and how we use it.  Instead of it being a mysterious force, whose financial and environmental costs seem impossible to comprehend much less control, our interactions with energy will take on a new shape, with edges. 

As an attorney, striving to leverage law on behalf of sustainable values, I see energy as the next most dramatic cultural moment. 

BETC: Will it be enough?

Of course, we all knew change would be inevitable, perhaps more so in an economic environment that finds individuals and government more keenly aware than ever of the cost of things.  Which reminds me of Oscar Wilde's aphorism, "A cynic knows the cost of everything and the value of nothing."

BETC now places much greater limits on large wind projects, limiting their credits from $3.5m in 2010, to $2.5m in 2011, to $1.5m in 2012.  It caps the renewable energy precertification costs at $300m for the 2009-2011 biennium and $150m for 2011-12. However, it caps the renewable enery equipment manufacturing facility credit at $200m for the biennium ending June 30, 2011, another $200m for the biennium ending June 30, 2013 and an additional $50m for the six months thereafter ending December 31, 2013. The sunset provisions for the statute have not changed; bear in mind that the BETC was not singled out in this regard as all tax credit programs were purposefully set to expire in 2012.  It did extend the manufacturing tax credit to Jan 1, 2014.  Perhaps most dramatically, it lowers the pass through rate for partners taking the five year 50 percent renewable energy tax credit to 7.12 percent for public, tribal and manufacturing projects and 4.29 percent for "all other projects".  On this last point the pass through rate was lowered from the pre-existing pass through option of 9.85 percent for ALL projects.  In the current economic climate, where my money market fund is churning out a hefty 0.75% rate of return from the bank, I see the possibility that the lowered pass through rate will still attract a substantial number of investors, provided the "risks" of new, emerging renewable generation are lowered as more and more of this projects come on line.  Further, the DOE's Director, Mark Long, has indicated  that he will reconsider the current pass through rate in 2010 if the investor pool dries up.  He now has much broader discretion to undertake such tweaking as well as he considers precertification of projects based on a new tiered priority system.

Of particular interest to me is the addition of electric vehicle manufacturing as an eligible facility, with a cap of $2.5m.  This should assist smaller Oregon start-ups without inviting in too many larger scale manufacturers.

Taken as a whole, especially given the Oregonian's concerted effort to sidetrack the program, the cynic in me says it could have been much worse.

BETC on the Block

For many emerging renewable energy technologies, Oregon's BETC provides the competitive advantage they need to draw capital and begin manufacturing.  This is as true for large wind farms sprouting like hypertrophic sunflowers east in the Columbia River Gorge as it is for small scale residential wind on the Chehalem ridge.  For Oregon to continue to attract meaningful investment, and generate jobs, it must position itself to compete against every other state who sees itself as the next capital of cleantech.  This is no small feat, nationally or globally.

The Oregonian has pilloried Oregon's Department of Energy, perhaps legitimately, for failing to be accountable for where the money has gone and  the number of jobs generated. As wind technology matures, it should not be up to taxpayers to subsidize multi-national, and international, corporations.  Everyone agrees that wind is a mature technology.  Nonetheless, the Oregon legislature should not kill the golden goose, but rather trim its wings so it doesn't fly away with so much taxpayer investment.  Caps and clawback are probably reality, as the DOE seeks to retain control over businesses who are overlyzealous in their prognostications of their own success.  The BETC should still, however, provide reasonable rates of return for investors as part of its pass through tax credit, else risk no investor interest going forward.  It should also seek to spur ongoing investment into emerging technologies that are decidely NOT mature.  Those should be the goals, leave the details to the politics.

Public comment begins Weds (2/3/10) and will be part of the Senate's Revenue Committee deliberations throughout the February special session.  .  All business leaders are invited to testify as to BETC's importance to their business.

Portland and Electric Vehicles (EV): Transforming our Love Affair with the Automobile

On Nov 9, 2009, I attended an all-day conference sponsored by PGE, Nissan, eTec, and Portland State University to highlight issues facing a three year, $100m pilot project funded by the DOE to prepare for the Oregon arrival of all electric vehicles, charging stations and ITS technology as part of a larger sustainable mobility strategy.

Because of its success in adopting hybrid vehicle technology, Oregon is one of five areas nationally to receive 1,000 Nissan Leaf sedans by December 2010. These are 5-person, 4-door sedans with 100m range whose price (25-30k), before fed/state tax credits, is anticipated to compete with comparable gas engine vehicles (GEV) such as Toyota Camry and Honda Accord. Each residential purchaser will receive a free charging station and data gathering device valued at approx $1500. In addition, 1000 stand alone Level 2 (220v) charging stations as well as some level 3 (440v) fast charge stations will be deployed throughout the Oregon test markets. Nissan and eTec’s goal is for 70% of these stations to be installed and ready for use by 12/1/10.

The Oregon test markets include Portland Metro, Salem Capitol, Corvallis-Albany and Eugene-Springfield regions. In addition some waypoints, presumably using fast charge Level 3 charging stations, will be placed between these areas along the I-5 corridor to act as connectors. This project is viewed, fundamentally, as a collaborative venture between public/private stakeholders, including otherwise frank competitors. eTec has over forty project partners involved. A successful rollout in Oregon is viewed as critical to the long-term viability and national acceptance of EV technology.

EV Use and Renewable Energy

A recurring theme throughout the conference was the natural affinity between EV use and renewable energy. Nissan repeatedly stated that the company is “all in” on its bet that EVs will transform the transportation and energy sectors; they expect to manufacture 50k EV units alone in the first year of global production. The Japanese City of Yokahama has received a similar rollout and is 6-8 mos ahead of Portland.

These cars are not mechanical so much as technological, which translates into several advantages for Oregon’s new economy given our existing software and hardware (silicon chip) manufacturing strengths. For example, these cars can be preset to tap into smart meters to utilize the grid at otherwise low demand times (early morning) when renewable may otherwise be underused. These cars have batteries which can capture and store energy from renewable sources and feed it back into the grid to meet peak demand. They can utilize solar based electric which has multiple benefits, including shortening the payback on solar’s capital costs given the value of the gasoline it displaces and decreasing utilities’ concerns that EVs will create an even greater draw on existing fossil fuel plants. Interestingly Nissan stated that even if all the electric energy produced for EV vehicle charging came from coal fired plants, the GHG benefit from NOT burning gasoline amounted to a 61% reduction in carbon emissions.

Nissan’s avowed goal is to be zero emission all the time. The Nissan LEAF is 99% recyclable; its batteries may degrade to 70-80% of capacity in 10 years but contain no rare earth metals, can be recycled, and can also be converted to electricity storage use outside the vehicle. Vehicles can communicate with owners via cellphone to inform them of the state of the charging, can send a text message reminder to recharge, and, when plugged in, can use the grid’s power to pre-heat or pre-cool and thereby eliminate additional energy draw on the battery when being driven for those purposes. PGE’s rep, Charlie Allcock, offered that the100 miles driven by a GEV with 25 mpg at current gas prices translates into $15 fuel cost; an EV’s electric costs amounts to $4-6 for the same 100m range. Jim Piro stated that PGE estimates that even with a 10% market penetration for EV’s by 2020, the additional load would only be 50Mw, a modest increase and well within PGE’s generation capabilities.

The transformative potential of EV technology cannot be overstated with regard to transportation, consumer economics, and GHG reduction.

Stay tuned for the latest on proposed changes to Oregon’s BETC, how the Oregon’s State Bar Association has integrated sustainability and what’s happening with energy efficiency retrofit pilot projects.