The Bottom of the Toolbox

Leaders and activists in Eugene hope a bureaucratic negotiation can help the city meet its climate goals.

Robert Scherle

On a cloudy Tuesday in March of this year, a youth-led consortium of fifty activists gathered at Skinner Butte Park in Eugene around noon. The group ranged from elementary school students to retirees. They practiced chants and songs, coordinated travel, and loaded up their bicycles with anti–fossil fuel signs zip-tied to their handlebars.

Trotter, a twenty-two-year-old member of the eco-activist group Sunrise Eugene, addressed the group through a megaphone. “The climate crisis is here! We need immediate acts of justice to face this existential threat!” they shouted. “We are fighting for a just and a livable future for all!” Then they revealed the end destination of the bike protest: a nondescript office building belonging to NW Natural, a natural gas utility headquartered in Portland. The crowd applauded.

The protesters pedaled three miles along the Willamette River to Goodpasture Island Road, then hung up their signs, positioned mock gravestones, and lay on the ground in front of the building’s fence, hands folded over their chests—a die-in. One protester climbed to the top of the NW Natural sign; another climbed a tree. The most flamboyant set off colored smoke bombs, painting the company’s lawn. Fifteen minutes in, two young activists—aged nineteen and twenty-one—climbed the fence to enter the NW Natural premises.

The cops were called; the enthusiastic climbers were arrested and taken to Lane County Jail on charges of trespassing. Later, their comrades positioned themselves outside the jail, banging pots and pans and hollering for their friends’ freedom in a kitchen orchestra rebellion.

The target of all this ruckus is NW Natural’s ability to freely lay new natural gas pipelines in Eugene, a city hell-bent on decreasing its emissions and ending its reliance on fossil fuels. In Eugene, activists and city officials alike are trying to understand the scope of municipal power amid increasing pressure from citizens to address social and environmental issues. In terms of climate change, Oregon’s third-largest city is attempting to effectively combat a global problem with a city’s agenda on a town’s budget, all while appeasing a progressive base.

In 2014, Eugene passed an unprecedented Climate Recovery Ordinance that made the city’s carbon emission reduction goals mandatory instead of voluntary. These goals were updated in 2016 and solidified in the 2018 Climate Action Plan 2.0 (CAP2.0), which ambitiously sought to reduce emissions by 7.6 percent annually and to reduce fossil fuel use by 50 percent of 2010 levels by 2030. After passing the 2014 ordinance, incumbent council member Alan Zelenka said, “I think the things that we will do to reduce our energy consumption and reduce our greenhouse gases are things that relate to efficiency and doing things smarter and better.” 

The announcement of the goals was met with fanfare. But when it came to implementation, “smarter and better” became cumbersome and convoluted. 

At the outset of CAP2.0, the City of Eugene identified three areas where it could take action while remaining comfortably within the scope of municipal oversight: transportation, building emissions, and fugitive emissions (leaks from gas storage tanks and pipelines). Other cities striving to set emission targets, such as San Diego, had overplayed their hands and ended up with toothless and unenforceable environmental policies. Hoping not to repeat those failures, Eugene charted a path distinctly within its jurisdiction: improving local transportation, increasing bus efficiency, and pursuing a highly publicized renegotiation of the city’s franchise agreement with NW Natural. 

Initially negotiated for a twenty-year term in 2001, the City of Eugene’s franchise agreement with NW Natural operated like most municipalities’ electrical service contracts: in order to adequately serve the customers within the city’s jurisdiction, the agreement granted NW Natural right-of-way to install and maintain natural gas infrastructure without being bogged down by a constant flow of bureaucratic permitting. In exchange, NW Natural paid the city an annual fee of $1.4 million. 

In 2019, with CAP2.0 instated and renegotiation of the franchise agreement coming up, the City of Eugene saw an opportunity to use contract negotiation as a tool to lessen community-wide emissions associated with natural gas. The city proposed that to renew the right-of-way, NW Natural would face additional fees and increased oversight in recognition of natural gas’s contribution to climate change. 

At Sightline Institute, a Seattle-based nonprofit focused on sustainability, Eric de Place directs the Thin Green Line program, which aims to curb the development of fossil fuel infrastructure in the Pacific Northwest. He says franchise agreements “are not ‘sexy’ with respect to climate change,” but they can be powerful tools for decarbonization: “This isn’t chaining yourself to a tree or creating grassroots action with a bullhorn, but cities have forgotten that this down-into-the-weeds agreement provides this enormously forceful leverage point to make utility companies act accordingly.” Treating franchise negotiations as climate action was new; it was nuanced; it was complicated; and it was polarizing.

Eugene’s mayor, Lucy Vinis, says, “We had no template to follow, no jurisdiction to follow.” Although the city had identified a potential avenue for climate action, the city council lacked the expertise, staffing, and wherewithal to bring the issue to the table. So local experts stepped forward to fill the gap. In May 2019, University of Oregon professor Joshua Skov and Matt McRae, the long-term disaster recovery manager for Lane County, presented a pathway toward a new type of reduction-focused franchise agreement, one that would penalize NW Natural if the company did not meet its goals with respectable fees. The Eugene Sustainability Commission, chaired by Zach Mulholland, came forward with a data-driven approach concerning greenhouse gas reductions, and a consortium of activist nonprofits including Sunrise Eugene, 350 Eugene, and de Place’s Sightline Institute contributed market research, local intelligence, and voluntary in-kind contributions. 

Concurrently, NW Natural was endorsing the State of Oregon’s natural gas strategy, working in collaboration with legislators and stakeholders in renewable natural gas (RNG)—that is, natural gas captured from decomposing organic waste. On June 19, 2019, the Oregon legislature passed Senate Bill 98, green-lighting the procurement of RNG for customer distribution—an initial strategy for cities like Eugene to decrease their emissions by switching to a purportedly new substitute for fossil fuels. Armed with information about this technological advancement and ready to negotiate, the City of Eugene moved the franchise agreement conversations behind doors as it tried to iron out a contract with NW Natural, much to the chagrin of some locals. 

Then the 2020 wildfires hit. That September, the number of harmful particles per square meter of air in the city—a measure abbreviated as PM2.5—exceeded 700. (The EPA’s Air Quality Index tops out at 500.) UO professor Skov says, “Having lived through the foreshadowing from the 2017 fires, I think something changed in a lot of people’s minds [in 2020]…. I think it spooked people, because life came to a halt…. It became less political and more personal, and we had to ask ourselves how often this was going to happen.” In 2017, RNG had seemed like an acceptable transitional option to both the city and the sustainability commission, but in 2020 the effects of climate change became less distant, and technology that might not be available for decades seemed like less of a viable solution. In a February 2021 Eugene town hall meeting, firefighter Tyee Williams, fresh from fighting the Pine Gulch Fire in Colorado, testified, “As someone who will have jobs created by NW Natural, I would like to say, I’m not appreciative of it.”

At the same time, the Eugene Sustainability Commission came to the city council with a gap analysis showing that the city was not going to meet its reduction targets even with the fee and commitment to RNG proposed in negotiations with NW Natural. At least, not under the direction of the NW Natural proposals. 

Eugene had proposed imposing a $740,000 annual climate fee on NW Natural, amounting to roughly 2 to 2.5 percent of gross revenues from customers in the city, to be used to improve residential energy efficiency. The sustainability commission’s analysis showed that the fee would decrease emissions by only 90 tons per year, with a ten-year reduction of 1,750 tons, excluding offsets—a far cry from the near 150,000 tons of reduced building-emitted carbon required by CAP2.0. And even if NW Natural committed to using RNG to supply homes, the commission found, the amount of available RNG would meet less than 5 percent of current demand. 

Laura Feinstein, a utilities expert at Sightline Institute, wrote in an article on the organization’s website in April, “The vision of widespread RNG use is not a reality that gas utilities can deliver. There simply isn’t enough of it, it doesn’t reduce enough carbon, and it’s too expensive.” At predicted prices, RNG would have tentatively cost Eugene’s consumers over $20 per million natural gas BTUs (the equivalent of one household’s use over ten days), a 604 percent increase from the current $3.31 per million natural gas BTUs. 

In light of such data, the sustainability commission began to question whether the agreement with NW Natural should even be pursued. So, after two and a half years, two negotiation extensions, and a failure to reach a resolution, the franchise agreement lapsed in May. The decision was met with community approval: the Democratic Party of Lane County released a statement thanking the city council for refusing to “sign a franchise agreement with NW Natural that would have made it impossible to reach the city’s science-based greenhouse gas-reduction targets and threatened the city’s ability to regulate its right of way.” 

Acknowledging the agreement’s lapse and the subsequent public applause, the lack of a franchise agreement remains a topic of discussion within city government. In a recent interview, Mayor Vinis said, “We are in a new territory and an uncertain landscape [as] we are right now functioning without a franchise agreement, though we are still having discussions [and] trying to find a pathway.” Some young activists think negotiation is a lost cause, while others maintain hope. Zach Mulholland, chairman of the Eugene Sustainability Commission, says, “I hope the City will return to a data-driven approach and not just pass a feel-good measure that does nothing to actually reduce emissions.”

Despite the lack of deliverable action, some locals believe Eugene is now poised to truly take the reins in the negotiation by implementing legislation before an agreement is reached. Even without the agreement, NW Natural is providing natural gas to its customers, and though the company no longer pays the franchise fees, the city has not lost its revenue, earning it through an existing natural gas supplier tax ordinance instead. With its capital stream maintained and full awareness of the past agreement’s paltry potential for reducing greenhouse gas emissions, Eugene holds the cards. And while some local stakeholder groups feel they were largely ignored in the preliminary agreement negotiations, they are still volunteering their expertise—now with renewed fervor, updated electricity findings, and recent state legislation to back their case.

In 2016, the Oregon Supreme Court upheld the City of Gresham’s increased franchise fees on NW Natural and Portland General Electric. Last August, the Eugene Water and Electric Board released a report suggesting it has the capacity to service a future-electrified city with more than 80 percent truly renewable energy over the long term. In the wake of these developments, Eugene finds itself in a much stronger position to negotiate, and without a pressing deadline. Mayor Vinis notes that the town has a couple of options: “One would be the franchise agreement, and the second would be a memorandum of understanding of decarbonization, as the council would say we could do either.” 

With these options available, activists hope any future agreement will include a pricing mechanism for low-income households, forensic accounting requirements, and, most of all, transparency. Sightline Institute’s de Place says, “Northwest cities and counties have a lot more control of their decarbonization than they think. They can exercise contractual leverage to supply homes and buildings with sustainable options…. It’s an interesting tool down at the bottom of the toolbox, and it’s getting dusted off…. It could act as a catalyst for other localities. Eugene is breaking ground.” 

Comments

No comments yet.

Add a Comment

Related Stories

Also in this Issue

From the Director: Old Jokes

Climate

Burn Down Valley

Getting to the Roots of Climate Change

Sagebrush Solar

The Bottom of the Toolbox

Beyond Capacity

Putting in the Work

One-Person Protest

Posts

People, Places, Things

Discussion Questions and Further Reading