Texas Oil Firms Behind California Greenhouse Gas Initiative

Under a ballot initiative approved Tuesday, a California greenhouse gas law could be suspended until unemployment numbers improve. Critics say the initiative is a veiled attempt at advancing Big Oil’s agenda.

California is headed for another showdown over greenhouse gases.

A citizen’s ballot initiative approved Tuesday could suspend AB32, the state’s landmark 2006 law mandating a 25 percent reduction in industrial greenhouse gases by 2020.

Backed by manufacturers and Texas oil companies Valero Energy Inc. and Tesoro Corp., the ballot initiative would halt enforcement of the law until California unemployment, now at over 12 percent, sinks to 5.5 percent for at least a year. The “California Jobs Initiative,” as it is called, is necessary to protect Californians from financial hardship at a time when they can ill afford it, its backers say.

“AB 32 will impose billions of dollars in higher utility rates and fuel prices on California families when they can least afford it,” Jon Coupal, president of the Howard Jarvis Taxpayers Association and co-chair of the initiative campaign told the Los Angeles Times.

Several state officials and national environmental leaders have already gone on the offensive to protest the initiative. With the backdrop of the San Francisco Bay – where the Cosco Busan oil tanker spilled 53,000 gallons of oil in 2007 – Mayor Gavin Newsom, Sierra Club Chairman Carl Pope and Bay Area environmental leaders held a press conference Wednesday calling on Valero and Tesoro to stop “bankrolling a deceptive, special interest effort to repeal California’s clean air and clean energy laws.”

The passage of the initiative benefited from significant out-of-state influence, say backers of AB32. Records from California’s secretary of state show more than $3 million has been spent to qualify the initiative, says Steve Maviglio, who has formed a committee called “Californians for Clean Energy and Jobs” to fight the initiative. Eighty percent of that money came from special interests outside of California, and 78 percent is oil money, he says.

The coalition of politicians and environmentalists issued a statement that referenced the environmental destruction brought on by the BP oil spill in the Gulf of Mexico. “It will be interesting to see how Californians react to a local environmental mess in the making that’s been bought and paid for by out-of-state oil companies that are already polluting our Golden State,” it read.

But the ballot initiative has nothing to do with the BP oil spill, counters Anita Mangels, communications director for the group behind the initiative. “It’s disappointing that proponents of AB32 have spent so much focus on the Gulf oil spill and other issues that have nothing to do with reducing greenhouse gases in California,” she said. “This law will cost a million more jobs and mean higher energy costs, and with well over 10 percent of Californians out of work, we simply can’t afford it.”

California made global headlines with the passage of AB32. The law, also known as the California Global Warming Solutions Act of 2006 – includes emission-cutting measures widely thought to fundamentally benefit California’s economy and public health.

The California Air Resources Board’s (CARB) economic analysis of the program, released in 2008, predicted the regulations would increase economic production by $27 billion, overall gross state product by $4 billion, and personal income by $14 billion. An accompanying public health analysis concluded that AB32 would help prevent 300 premature deaths statewide, avoid almost 9,000 incidents of respiratory symptoms, and avoid 53,000 workdays lost to illness.

Supporters of AB 32 have come together to criticize the oil companies behind the initiative and praise the impacts of AB32. The law has already spurred a large market for clean tech energy sources, they say, and provide a list of 300 beneficiaries that “reads like a who’s who of the clean-tech world,” according to the Los Angeles Times.

Valero, which owns two California refineries, has mounted an aggressive campaign against federal efforts to pass climate legislation, says Mr. Maviglio. Postponing California’s rules to limit greenhouse gases could aid that national strategy, he says.

Officials of Valero Energy Inc. and Tesoro Corp. declined to comment for this article.