If oil companies paid their way...

I debated whether to post another story about an oil company protest so soon after the one I did a few weeks ago on AB32, but the behavior of oil companies is a hot topic right now and rightfully so. There are many stories coming to light and this one is about more than just the environmental impact, it is about about a devastating financial impact as well. You don’t have to live in California these days to know that the state is in the throes of a $19.1 billion budgetary deficit that has already forced many spending cuts and threatens to implement many more. Jobs are at stake, and social programs and education will also undoubtedly feel the pain.

Now, you reduce deficits by either cutting spending or raising taxes, so what other oil producing states have done is to exact something called an oil severance tax, which is a royalty paid by the oil company for the right to extract the oil from the state’s land and water. The idea is that if you are going to deplete a valuable natural resource from the land, you need to pay for it. Seems fair, and even other oil producing countries have this tax which are usually much higher than the ones imposed in this country.

The problem is that the only oil producing state that does not have this severance tax is California. There have been several attempts to rectify this, most recently in 2006 with Proposition 87, which would have implemented a 6% tax on oil extraction. It had widespread support but faced a $95 million campaign funded by oil companies and went down to defeat 54.7% to 45.3%.

Lest you think this is a right versus left thing, consider that Gov. Sarah Palin and the Alaska GOP controlled legislature instituted a 25% tax on oil extraction and now have a multibillion-dollar budget surplus. The California 6% tax would have been modest in comparison, and would have raised about $1 billion in annual revenue, but at least it would have been a start. Critics argue that the tax would force prices up, chase oil companies from the state and eliminate jobs, but these are all the red herrings that are always thrown out when oil companies are threatened with a reduction of their massive profits and are debunked quite rightly by those outside the industry.

Last Thursday, over a thousand people, made up of union workers from SEIU Local 721, as well as students, childcare workers, school employees, and various community organizations marched from the Federal building in Westwood to the Occidental Petroleum offices a few blocks east on Wilshire and Westwood Blvd. The line of people stretched for blocks as the protesters gathered in front of the offices and emptied small fake bottles of oil at Occidental's doorsteps.

When I told people about the rally and march later, several of them asked if something like that actually makes a difference. I responded that the only thing I knew for sure was that if all those folks had stayed home, then absolutely nothing would have been accomplished. At the very least, demonstrations serve to rally the community and to energize those participating, who in turn have a chance to educate others about the situation, just as I am doing here. Not participating is exactly what the oil producers hope for. Maybe with talk once again of instituting an oil severance tax, the time will be right to actually make it happen.

AB32

If there was one thing Governor Schwarzenegger did right during his term, it was to enthusiastically sign AB32, the California Global Warming Solutions Act of 2006, the landmark state law that would reduce carbon emissions and greenhouses gases back to their 1990 levels by the year 2020, a nearly 25% reduction. As you would guess, there are going to be those that are not too happy about such a thing, but who would imagine the absolute chutzpah it would take to launch an initiative to suspend this law under the premise that it would cost us jobs? Why, it’s our old friends the oil companies! You see it is not that they are afraid that their profits would suffer if we started to rely more on alternative fuels or that our air quality improved, but that our jobs would be lost. Yes, I’m sure that really keeps them up at nights, worrying about our jobs. Well, less we doubt them, they have decided to call their November ballot measure the “California Jobs Initiative”, and with a name like that, you know they have to be sincere.

If passed by the voters, the “California Jobs Initiative” would suspend AB32 until the unemployment rate in California falls below 5.5% for at least one year. The current unemployment rate is at 12%, so given the speed that things are going, it would be a long, long time before they would have to comply, giving them more months and years to spew out their toxic emissions and greenhouse gases without regulation. It actually gets uglier, because you see the two oil companies who are funding the initiative are not even from California, they are from Texas. Tesoro Corp. and Valero Energy Inc. are two oil giants who have decided they know what is best for us, and what kind of air our children should be breathing.  The two companies have already bankrolled the imitative with over $3 million to help qualify the measure for the November ballot.

I joined a group of protesters last weekend who were rallying at the Tesoro refinery in Wilmington, a town near Long Beach and home to several oil refineries. I wrote about the Toxic Tour a few weeks back and you may recall that Wilmington residents are subjected to a constant barrage of toxic emissions from the nearby refineries, and are the people who will be most affected by a repeal of AB32. The crowd consisted of local residents and enthusiastic students from the nearby high schools. They are enthusiastic because they know it is their future air quality and health at stake. They picked “Family Day” to protest,  a day where Tesoro employees could bring their kids to tour the refinery. What a bizarre way to spend an afternoon, but it obviously sounded like a spanking good time to some, because by the time the protesters got there, lines of SUV’s and minivans were bringing loads of happy visitors to the facility, and inside, golf carts were zipping around with Moms, Dads and the little ones, as the refinery belched out fumes, gases and other non-breathables.

The protesters, organized by CBE - Communities for a Better Environment, and other local groups, peacefully picketed in front of the gates, letting in traffic and causing no disruption to Family Day. After an hour or so, they left, but the point was to let them know that people are watching and paying attention.

Contrary to what the oil companies tell us, The California Air Resources Board's (CARB) economic analysis of AB32 forecasts that economic production would actually increase by 27 billion dollars, the gross state product by $4 billion and personal income by $14 billion. Moreover, their preliminary analysis indicates that the total economic value associated with public health benefits is likely to be on the order of $4.3 billion by 2020. Gov. Schwarzenegger has said that “This initiative sponsored by greedy Texas oil companies would cripple California's fastest-growing economic sector, reverse our renewable energy policy and decimate our environmental progress for the benefit of these oil companies' profit margins.”

If Tesoro and Valero have already poured $3 million dollars just to get it on the ballot, one can only imagine how much they are willing to spend to get it passed, but we all know how deep their pockets are and to what lengths they will go to protect their profits. It is infuriating to me that a ballot measure can be worded so misleadingly, but if people understand what is really at stake, if it is exposed for what it is, it will fail. The public’s opinion of oil companies is at an all time low and that can only help. But it is up to each one of us to talk about this with others, and  for California voters to go to the ballot box in November to cast their vote if we don’t want Texas oil companies deciding what is right for California.

Is this just about California? Keep in mind that if this landmark environmental law is repealed in California, clean air legislation in other states, and potentially on a federal level, will be stifled, and oil companies and other polluters will be empowered to cripple progress elsewhere. I will post more about this situation as it progresses, but this is a battle that can and must be won.