September 21, 2010
Big Oil’s Challenge to California Climate Law Draws Fire From… Big Oil
Public interest groups, city halls, and even one of the state’s largest refiners are fighting back against a tide of money pouring into California from three oil companies bent on enacting Proposition 23, the November ballot initiative intended to suspend the state’s pioneering climate action law.
Of the $8.2 million spent by supporters of Prop 23, $6.6 million was contributed by three oil developers, two from Texas and the third based in Wichita, according to the California Secretary of State.
Opponents of Prop 23, which would end state-mandated clean energy, conservation, efficiency, and land use planning measures that California enacted in 2006 to curb carbon emissions, have raised $6.1 million, with the largest contribution, $2.5 million, coming from a San Francisco hedge fund manager.
Leaders of both sides anticipate millions more could be spent before November 2 to sway public opinion, which observers indicate tilts in favor of climate protection and against Prop. 23. After disappointing results in the Senate this year, the vote is widely seen as a significant new test of American interest in curbing carbon emissions and responding to the threat of climate change.
In 2006, California enacted the Global Warming Solutions Act, the most comprehensive climate action law in the United States. It called for reducing greenhouse gas emissions to 1990 levels by 2020, generating a third of the state’s electricity from renewable sources by 2016, significantly improving energy efficiency and conservation, and taking other step that proponents said would also generate new businesses, thousands of manufacturing jobs, and make California more competitive in the global economy.
Proposition 23 would render the state climate action low moot. The renegade proposal calls for suspending the climate law’s mandates and directives unless the state’s unemployment rate drops to 5.5% for a year, which it has done only three times in the last four decades. State unemployment in July was 12.3 percent, the third highest in the country.
The mayors and city councils of dozens of cities oppose Prop. 23. Equally influential opposition comes from surprising places, including Shell Oil, which operates a refinery in Martinez and opposes actions by sister oil companies to suspend its provisions. Chevron, meanwhile, says it is neutral. Exxon Mobil and BP have decided not to get involved. Even the state Chamber of Commerce decided earlier this month to remain neutral.
Another source of strength for climate activism is California’s high-tech clean energy sector, which strongly opposes Prop 23. Wendy Schmidt, wife of Google Chief Executive Eric Schmidt and president of the Schmidt Foundation, donated $500,000 to the No on 23 campaign in June, according to the California Secretary of State’s Office. Venture capitalist John Doerr, an important clean energy investor, donated $500,000. Vinod Khosla, another clean energy investor, warned that "Prop. 23 will kill the market and the single largest source of job growth in California in the last two years."
That hasn’t deterred supporters of Prop 23, three of whom are providing the bulk of the funding. Texas-based Valero Corporation and Tesoro Corporation together operate 4 refineries in California, and the Kansas-based Koch Industries, the nation’s largest privately-owned oil company, opposes any action to impose controls on carbon emissions. Their beef, no surprise, is that the cost of installing carbon controls on old refineries is too high, a complaint that is not shared by other refiners in California.
Nevertheless, Charles Drevna, president of the National Petrochemical and Refiners Association, sent an email a week ago to the group’s more than 400 members nationwide that said, without any documentation at all, that failing to stop the state climate law would put 1.1 million Californians out of work, raise gasoline and diesel costs, and boost electricity rates by 60%.
Laura Dixon, a spokeswoman for Governor Arnold Schwarzenegger, more accurately described Drevna’s message as “a sad and pathetic attempt by Big Oil to keep California in the dark ages of energy efficiency and clean air.”
Until next week, take care, Keith Schneider