KATU: Paper mill workers concerned with long-term effects of cap and trade bill

Via KATU News

Workers at one of the Pacific Northwest's largest paper mills are worried Oregon's cap and trade bill will mean job loss and industry downsizing in a field that is already seeing cuts and companies moving overseas.

The Wauna Pulp & Paper Mill employs about 750 people in Clatsop County. It is the county's largest single employer.

Georgia Pacific (GP) owns the paper mill. The company is one of about 100 that will be impacted by House Bill 2020.

Bill Kerr works full time at the mill, helping to operate machine No. 5, which produces tissue paper. Kerr is also the president of Local Steelworkers 1097 union, representing 600 of the 750 employees.

Kerr argues the pollution caps under HB 2020 will create a competitive disadvantage and cause companies to relocate, all while doing little to address climate change.

"Businesses will relocate to other states that have a lot less restrictions than the state of Oregon," Kerr told a KATU reporter.

Kerr says in addition to direct job loss, the union says about 2,500 people will be indirectly effected. This group includes loggers, truckers, electricians, shipping and other contractors.

"Most of them will be forced to find other jobs," he said. "You can't pick up a newspaper and see a wanted ad for a machine tender out there. You would have to go somewhere, start from the bottom and work your way up."

If the mill relocated, Kerr says about $375 million in payroll would be lost. He says much of that money is spent in Clatsop, Columbia and Cowlitz counties where many of the workers live.

GP has not commented directly on the measure, and it is not clear whether the company would move the mill if HB 2020 is signed into law by Gov. Kate Brown.

However, the bill allows for several industries, including manufacturing, forestry, agriculture and pulp and paper mills to receive some exemptions, as some of them fall in the bill's Energy Intensive, Trade Exposure (EITE) sector.

Under EITE exemptions, some companies will be allowed to discharge 95 percent of their emissions for free for the first three years. After that, they can still receive allowances, if they prove to the state they're using the best practices to curb greenhouse gases.

Chris McCabe, the executive director of the Northwest Pulp & Paper Association, says "that high volume, low margin industries like manufacturing are always going to be driven by numbers when making important decisions about production costs."

McCabe says Oregon mills don't compete against each other. He says they compete against mills around the world, often within their own companies.

"Significantly raising energy costs on Oregon mills," McCabe said, "will easily tip the economics in favor of shifting production out of state."

Exactly Kerr's concern. He says even the three-year grace period is not enough to keep a mill in Clatsop County.

"I will survive this. I am going to retire out of this mill in three years," Kerr said. "But, I think the young people should have a chance to stay in the communities that they grew up in, work their butts off, get a product out the door that the consumer actually needs and live the American dream like I have had the chance to do."

Supporters of cap and trade, like Nancy Hamilton of Oregon Business for Climate, say with this bill, the state can meet its 2050 climate goals while achieving economic growth.

"It's a transition that is happening right now globally, that we need to decide whether we are going to be a part of leading the transition or following the transition," Hamilton told KATU. "Every economic report we’ve seen, what we’ve seen in other jurisdictions that have employed a similar program, have seen economies thrive, jobs grow."

Hamilton says money from the sale of carbon allowances is forecast to be about $500 million in the first year of the program, 2021. These funds would go toward climate change mitigation and adaptation, renewables, energy efficiency, and to reduce the impact of the policy itself on both businesses and households.

The bill also includes a Just Transition Fund, which provides $10 million in funding to support job creation, job training and programs and activities that provide financial support for workers displaced by climate change or climate change policies. Money comes from companies who pay for releasing excess emissions.

According to the Berkeley Economic Advising and Research (BEAR) study conducted on behalf of the state's Carbon Policy Office, Oregon is also forecast to receive economic benefits of improved air quality, in terms of averted medical costs and premature mortality -- contributing about 1/3 to overall economic growth.

Still, Kerr is weary of what the future may hold for him and other mill workers.

"I have personally, sat, cried and prayed with friends that are no longer in this industry anymore," Kerr said. "Take rural Oregon into account."

Full statement from Chris McCabe, Exec. Dir. of Northwest Pulp & Paper Association:

“Oregon pulp and paper mills have made tremendous strides in reducing their carbon emissions over the last decade. In its current form, HB 2020 puts thousands of family-wage jobs at risk and is certain to cause higher global emissions as production shifts from green, low-carbon emitting mills in the Pacific Northwest to locations in other countries and states with far less stringent environmental regulations. Unfortunately, despite our association’s best efforts, this legislation is not ready for primetime. In its current form, this legislation will not reverse climate change, but it will adversely affect local jobs.”

Preston Mann