Gov. Ted Kulongoski spent more than half an hour recently reading through his laundry list of 16 proposals to address climate change in the 2009 Legislature.

And then, in under a minute, he buried his message of hope in a big black cloud of car exhaust.

“My greatest concern right now is that with the falling price of oil and gas at the pump, the voices of delay will start being heard, telling us that confronting climate change can wait,” Kulongoski said at a press conference last week to announce his climate-change agenda.

The governor’s fears are right on the money.

The price of gas in Portland fell below $2.30 a gallon at some stations last week, with an overall average of $2.78 a gallon, according to AAA. That’s down from a high of $4.27 in July. And last week Deutsche Bank, scared by predictions of slower global economic growth, lowered its 2009 oil forecast from $92 a barrel to $60 and to $57.50 a barrel in 2010.

That’s got some Portland clean-energy companies, investors and economists worried that cheaper oil will slow the growth of Oregon’s green industries and smother the political will to pass new incentives when the Legislature meets in 2009. That, in turn, will make it harder to meet the state’s goals—set by the 2007 Legislature—to reduce greenhouse gas emissions to 10 percent below 1990 levels by 2020.

Beyond the obvious environmental impacts of delaying energy conversion, the trend is worrisome because Kulongoski and Portland Mayor-elect Sam Adams are banking much of our economic future on attracting so-called green businesses.

“In the private sector there’s likely to be less investment in all kinds of new energy,” says Joe Cortright, a consultant and economist on the governor’s council of economic advisers. “It kind of ripples through the market.”

Cheaper oil won’t mean lower electricity bills—which depend on natural gas and coal prices—so don’t expect to see fewer wind farms or solar factories as a result.

But plunging oil prices will hit alternative transportation, which looks less competitive than when oil climbed over $100 a barrel, says investor Wayne Embree, managing partner of Reference Capital Management in Tigard. Cheaper oil makes biofuels and electric cars more expensive by comparison and thus less attractive to cash-strapped drivers.

“The price of oil does have some factor for people thinking about switching to alternatives,” says Jeff Kim, chief operating officer of Portland-based Shorepower Technologies, which in July built Portland General Electric’s much-hyped prototype electric-car charging station. “As prices went up there was definitely a higher demand.”

Now in the past three weeks, he says the plunging price of petroleum at the pump has meant slower growth for his business.

If investors start running from the clean-tech sector, the rollout of electric vehicles and short-term use of biofuels would suffer. Coupled with consumers’ tight-fisted spending on big-ticket items, the whole mess could render some of the governor’s proposals nearly useless.

Among them: a proposed $5,000 tax credit to buy electric vehicles, for example. And if consumers lose short-term interest in alternative vehicles, investors may also.

“The only thing that will draw interest from investors for a while on the fuel side is cellulosic ethanol” because of its long-term potential for profit, Embree says.

Forecasters do expect oil prices to climb back up eventually, however. The dual threats of peak oil and climate change aren’t going away. And policymakers and investors insist the momentum behind the green movement can’t be undone and will even put Oregon ahead of other states in reaping the economic benefits when the market bounces back.

“‘Drill, baby, drill’ doesn’t produce many jobs, and we don’t have that many options to drill,” says Ron Pernick, a clean-tech investor and founder of Clean Edge in Portland. “To create jobs and move us away from volatile fossil fuels and start to address environment and economic needs, this is an area of opportunity.”

New state policies supporting clean tech and renewables will be critical for seeing the industry through the current crisis and ensuring the state’s leadership, says Jon Norling, co-owner of Portland Biodiesel.

The city and the state renewable fuel standards, which require all gas stations to carry biodiesel blends among other things, has already helped sustain the renewable fuel startup. The city ordinance ensures a market for the fuel, despite a widening gap in costs between diesel fuel and biofuels, he says.

“Sure, oil prices have some effect in bad economic times,” Norling says. “But it’s just going to be a blip. In the long term we’ll see diesel back up over $4 or $5 a gallon.”