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Prop. 23: Oil giants are divided

Prop 23 signs 
Are the big oil companies really backing Proposition 23?

Maybe not. Among California's major oil refiners, Shell Oil opposes the November ballot initiative to suspend the state’s global warming law. Chevron Corp. is officially neutral. Exxon Mobil and BP have decided not to get involved. ConocoPhillips has yet to contribute. 

On Tuesday, Charles Drevna, president of the National Petrochemical and Refiners Assn., issued an urgent appeal for funds to back the measure. “I am pleading with each of you -- for our nation's best interest and for your company's own self-interest,” he wrote in a confidential e-mail to the industry's 416 members.

“The money raised so far, he wrote, “is not enough to win the fight against environmental zealots led by Gov. Arnold Schwarzenegger, who seems hell-bent on becoming the real-life Terminator of our industry.”

Three independent refiners -- Valero Energy Corp., Tesoro Corp. and Koch Industries -- have contributed most of the $8.2 million behind the measure. Backers would need to raise far more to make a dent in the state's expensive and saturated media markets in the seven weeks remaining before the election.

The state's top business groups also are divided. The California Manufacturers and Technology Assn. supports Proposition 23, but the state Chamber of Commerce decided on Sept. 3 to remain neutral. Silicon Valley, which is heavily invested in alternative energy technology, strongly opposes the initiative.

So far, opponents have raised $6.1 million, with the largest contribution, $2.5 million, coming from San Francisco hedge fund manager Thomas F. Steyer.

The initiative would suspend the 2006 law until the state’s unemployment rate, now more than 12%, drops to 5.5% for a year, which it has done only three times in the last four decades. The law, known as the Global Warming Solutions Act, or AB 32, aims to slash carbon dioxide and other planet-heating pollutants from industry and transportation to 1990 levels by the end of the decade, a drop of about 15% below today’s emissions.

In his e-mail, Drevna said the initiative could “mean the difference between life and death for our industry in this century.... AB 32 would give the California Air Resources Board (CARB) powers any dictator would envy.... For all practical purposes, AB32 would have the effect of outlawing petroleum-based fuels in California in the second half of this century.”

Drevna added that the law, which aims to slash greenhouse gases by 80% by mid-century, would  put 1.1 million Californians out of work, raise gasoline and diesel costs and boost electricity rates by 60%.

Laura Dixon, a Schwarzenegger spokeswoman, called the letter “a sad and pathetic attempt by Big Oil to keep California in the dark ages of energy efficiency and clean air.”

Oil-company divisions may reflect the fact that firms such as Chevron, which have upgraded their facilities, may have to spend less than competitors to comply with future rules to cap refinery emissions. International companies, such as Shell, which already operate under a greenhouse gas cap-and-trade program in Europe, may also be counting on offsetting their emissions in California with credits from overseas facilities.

Companies may also have decided they have more to gain by lobbying state officials who are developing greenhouse gas regulations, than by fighting for an initiative that is, so far, lagging behind in the polls. “The costs to reduce greenhouse gas emissions will fall to California consumers,” Chevron said in a prepared statement.

But the company that operates the state's second- and third-largest refineries, in El Segundo and Richmond, added, “At this time we are working closely with the California Air Resources Board to develop a reasonable program that ... allows for California’s economy to grow and remain competitive.”

BP, which operates the state’s largest refinery, in Carson, said it has not taken a position on the initiative. AB 32 does not adequately protect California industry from unregulated competitors outside the state, said BP spokesman Steve Rinehart. But the company, he added, is "focusing our resources on advocating for a well-designed AB 32 program that delivers on the emission reductions goal in a way that minimizes impacts on California consumers and businesses."

Environmentalists acknowledge that big money could still come into the state to support the initiative. "But is interesting to see the industry divided, isn’t it?" said Bill Magavern, California director of the Sierra Club. "My hunch is that those companies know that the initiative is a loser, and most of them see a lot more to gain in working on the AB 32 implementation process....

"When you’re having some influence on the rules that will affect your business, why divert attention and resources to an unpopular, expensive ballot fight?"

-- Margot Roosevelt

Photo: Signs protesting Proposition 23 at a Valero station in Mountain View, Calif. Credit: Jack Owicki/


Comments () | Archives (9)

The comments to this entry are closed.

"So it is 2 Texas oil companies and Carly Fiorina, representing outside interests, "

These are American refiners that produce no oil They have to buy oil on the open market. Oil companies produce oil from wells.

These "outside interests" pay hundreds of millions of dollars in taxes to California, and hundreds of millions of dollars in payroll to thousands of Californians.

If you drive a car in California, I promise you have used gasoline from both of them, as gasoline stations and tanker trucks buy from whatever is available, not what the sign says on the station or truck.

Even if you don't drive a car, your life is touched by them, in the diesel that powers the trucks that bring your consumables to the store.

Outside interests, hardly,...

If Proposition 23 is rejected, here is what will happen according to expert sources:

•A 60 percent increase in your electricity bill according to the Southern California Public Power Authority.

•An 8 percent increase in your natural gas bill according to CARB’s economic analysis.

•$50,000 more for the price of a new home according to an analysis by the National Renewable Energy Laboratory.

•$3.7 billion a year more for gasoline and diesel according to Sierra Research.

•A $1,000-$3,000 additional cost for a new car according to CARB and automaker studies.

On top of all that, a study conducted for the California Small Business Roundtable found that AB 32 regulations would cost small business alone nearly $200 billion, and would result in more than 1 million lost jobs.

The more I learn about AB 32, the more I fear it. It just gets worse. Please vote yes on Prop23.

""2 Guys on the Bay Area Transportation Board told the CARB people, "If you try to do what you are going to do(AB 32) we'll have gas at $9.07 a gallon and we have freeway tolls at up to $4,500 a year to drive during rush hour."

"Part of the plan is to stop suburban development, get people to stop driving, make driving too expensive for people to live out there, force them to live in high-rises, condos, in the city."

For months, John and Ken have made Prop 23 their top priority, calling it a necessary step to stop a law they say will kill jobs and cost Californians a fortune in higher gas and energy prices. With an estimated one million listeners per week, these two guys usually manage to rally enough votes to get their way.

The video has John and Ken explaining why they think this bill is the most important measure on the ballot.

Let's keep this really simple. If clean energy isn't nationally strategic and one of the most important technology sectors of the 21st century, then why is the Chinese government (which is very cunning and strategic) investing heavily in wind, solar, and battery storage? China installed more wind energy in 2009 than the US or Europe. It is developing some of the best solar technology in the world. Why? Because China isn't stupid enough to remain addicted to oil. So, supporters of Prop 23, you talk about jobs. If Prop 23 passes, Valero will be more profitable, and energy technology jobs will be available in China. China would never allow an oil company in Texas to dictate its national energy security. A vote for Prop 23 is a vote to grant other countries the lead in energy technology. Also, a lot of clean energy is winning without subsidy. Look at the LCOE of wind. And while we're on subsidies, let's make the oil companies escort their own oil tankers around the world. Will Valero be profitable if it has to buy its own nuclear aircraft carriers? Think, people, think. If Prop 23 were a good law, wouldn't there be more interest than the three most polluting refineries in the world? Vote No on Prop 23, and boycott Valero and Tesoro. Tell them not to mess with our California. We have a right to our air quality, they can vote in Texas if they want to change laws.

This article about what "big bad" oil company is for or against Prop. 23 is a really just smokescreen to dirvert everyone's attention to the real problem with AB32. AB32 has and will continue to cause California to lose industry and jobs. AB32 is a "cap and tax", plain and simple. Our unemployment rate was tracking the national average until AB32 was passed. Now it is much higher. While the unemployment rate has stabilized and fallen nationally, ours continues to climb. No one wants to put their business in this state, with AB32 taxes looming ahead. It is going to raise energy costs by 30 to 40 percent for EVERYONE. It will increase the cost of goods and services. It will siphon at least 10 billion dollars out of the economy. What is the purpose of AB32? It won't reduce CO2 by any amount that would have an impact on global warming, whether it is man made or not. It is purely a job killing symbolic gesture. AB32 is stupid, and should be repealed.

I am an electrical engineer in the MEP industry. I will tell you first hand, as a witness to exactly HOW the CA State intends on implimenting these standards (i.e. CalGreen), that any form of carbon reduction translates into increased costs for business. There is no two ways about it. The increase in cost, which is ultimately passed down to the consumer, stops or slows demand. In a recessive economy with the jobless rate climbing, carbon reduction initiatives (regardless of the FACT that man-made carbon emissions have nothing to do with global warming) serve only to stifle our recovery. Current green standards in CA are all about cost savings (i.e. LEED), and will remain that way regardless of carbon reduction initiaves.

salvage, reuse, recycle, stay local. these are the tributes to sustainability. if you are going to go green, do it right!


Arnold WAS full of it when he signed the thing back in 06

So it is 2 Texas oil companies and Carly Fiorina, representing outside interests, that are leading the effort to push Prop 23 to set California back in creating an energy economic boom for Californians, so once again it is Fiorina sending jobs to China which is a Communist controlled economy that for some reason Gingrich, Whitman and Fiorina keep plugging as a model of success.

Thanks for bringing some nuance and behind the scenes insight to this issue.

Drevna says "AB32 would have the effect of outlawing petroleum-based fuels in California in the second half of this century." - rather than outlaw, I see it as a natural transition between old fossil fuel technology and new emerging clean renewable energy. California is on the forefront of clean tech in the US.

AB32 is the future. It incentivizes the fastest growing industry in the world.

For more on Clean-tech leaders views on Prop 23, see:

At least nobody is questioning that there is an inverse relationship between enforcement of the Church of Global Warming's edicts and employment.

That's certainly progress.

arnold is full of it


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