Conflict of Interest Derails Biodegradable Bill

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An Oregon state legislator introduced a bill last week that would require all state construction projects to use biodegradable lubricants, then quickly withdrew it due to a conflict of interest. One of its backers, Sen. Chip Shields (D-Portland), is a lubricants salesman for Schaeffer Manufacturing.

Last week, Rep. Lew Frederick (D-Portland) introduced House Bill 3052, which would require biodegradable lubricants in all public construction projects. In doing so, Frederick noted that the bill was conceived by Shields, but he did not explicitly identify Shields as a senator.

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The ideas behind this bill came from one of my constituents, Chip Shields, Frederick told theHouse Committee on Consumer Protection and Government Effectiveness. He works for a company that includes a product line of biodegradable lubricants, and since he has a conflict, he brought the idea to me to consider in the House. He helped me understand this issue and assemble my testimony for today.

According to minutes from the meeting released on the committees website, Frederick did not point out that Shields is a state senator, and committee members did not ask.

Frederick told Lube Report that he withdrew the bill at the request of Shields, after local newspaper Willamette Week published an article identifying Shields as a senator and a shareholder in Schaeffer. The paper contended that Shields role in the bill was improper since it could directly benefit his company.

When I think about it, it was definitely stupid, and I will pull the bill back, Shields told The Oregonian newspaper, according a March 13 story. Frederick contended he did not try to hide the fact that Shields is a senator, saying he assumed everyone recognized him as such.

The bill would mandate all public improvement contracts to require use of biodegradable lubricants in construction equipment, except when a contractor showed that available biodegradable products would not perform adequately.

The second part of the bill called for the states Department of Environmental Quality to establish a set of standards for determining a lubricants biodegradability, noting that the state may recommend specific lubricants that meet the standards that the department adopts.

In his testimony to the House, Frederick noted that the bill would benefit the overall lubricants market. Virtually all of the major and many minor lubricant manufacturers carry lines of biodegradable lubricants today, particularly in the hydraulic fluid product line, he said, highlighting three brands of lubricants – Chevron Clarity, Mobil EAL and Shell Naturelle.

Biodegradable lubricants do cost more up front, but they require less expensive cleanup and usually generate less in fines. In other words, regulators reward construction companies for using biodegradable products when environmental cleanups are required, he added. Construction companies that do the right thing and choose to use biodegradable lubricants may be disadvantaged in the bidding process on state-sponsored projects as things stand today, due to the higher up-front cost.

[The bill] will be good for all Oregon land and water, he concluded.

Frederick told Lube Report that although he will withdraw HB 3052, he will still support biodegradable lubricants. I remain interested in preventing spills of any substance that causes problems for the environment and/or the industry because of cleanup costs, he said. Part of the bill called for a study of just this. It will mean further discussions with [Oregons] Department of Environmental Quality and others before we place the bill or the ideas of the bill before the affected groups.

Shields confirmed to Lube Report that the bill has been withdrawn.