California’s cap-and-trade bill is a giant wet kiss to big oil

  • Published on July 13th, 2017

If California is so green, why is big oil about to get a giant wet kiss from the Democratic legislature – a cap-and-trade bill written from big oil talking points that gives away the store?

By Dan BacherPhoto of California oil wells courtesy of Center for Biological Diversity

Consumer Watchdog and Food & Water Watch oppose Assembly Bill 398, California’s cap-and-trade bill, calling it “a massive giveaway of billions of dollars to the oil and gas industry that fails to rein in one of the largest sources of greenhouse gas emissions in California.”

Both organizations are calling on state legislators to defeat the cap-and-trade bill, a measure that might go through the Legislature as soon as tomorrow.

UPDATE Thursday evening: Jerry Brown’s cap-and-trade bill passes Senate Environmental Quality Committee

“Jerry Brown calls climate change an existential threat, but this bill is a sell out to the oil and gas industry that does nothing to avert that threat,” said consumer advocate Liza Tucker of Consumer Watchdog. “Brown and lawmakers who support this bill will be helping the oil and gas industry continue to pollute rather than slash their emissions.”

The bill is opposed by many environmental justice, consumer and conservation groups, although supported by some “Big Green” NGOs, including some of those who supported the controversial Marine Protected Areas/MLPA Initiative.

Big oil is happy to give you their cap-and-trade talking points

The Western States Petrolium Association is a big fan of Brown’s cap-and-trade legislation. Why wouldn’t they be – the WSPA and the oil industry collaborated with the Brown administration to craft language that has apparently been incorporated into Assembly Bill 398.

On June 28, In These Times revealed that leaked documents show that the Brown administration was promoting a cap-and-trade measure, not then yet a bill, laden with talking points that appear to be “ripped near verbatim from a policy paper by the state’s influential oil and gas lobby.” (…)

Tucker said AB 398 creates “several exemptions” for the oil and gas industry and fossil fuel power plants from air pollution regulation by giving the Air Resources Board (ARB) total authority over their emissions. “It then straightjackets ARB’s oversight by requiring it to regulate only via cap-and-trade, prohibiting it from crafting meaningful greenhouse gas reduction goals,” she stated.

“Governor Brown is once again favoring the oil and gas industry, giving it a pass to pollute for another decade,” said Adam Scow, California director at Food & Water Watch. “Legislators who care about public health and California’s future must reject this bill and instead demand polluters make real emissions reductions at the source.”

Tucker and Scow said that if the bill is approved, the oil and gas sector will see “immediate benefit in the form of reduced regulation.” Brown’s legislation pre-empts local air quality districts that regulate the biggest refineries in the state, preventing them from setting stricter emissions limits that polluters would have to meet.

“In addition, the legislation makes the cap-and-trade program, which relies on the issuance and sale of emissions ‘allowances,’ even more favorable to the oil and gas industry. The program would keep carbon emissions cheap by continuing to give hundreds of millions of dollars’ worth of free pollution credits to the oil and gas industry,” they said.

“The legislation also exempts the electric power industry from state taxes. The lost state taxes will be made up for with cap-and-trade revenue that would go into the general fund. That cap-and-trade revenue then will not be available to fund pollution monitoring or reduction programs,” Tucker and Scow concluded.

The California Environmental Justice Alliance (CEJA) also strongly opposes AB 398.

“California has some of the dirtiest air in the nation and environmental justice communities need stronger provisions to address our climate and air quality crisis,” the group said in an action alert. “However, AB 398 includes a horrible give away to Big Oil that ties the hands of our local and state regulatory authorities, preventing the Air Resources Board from enacting critical regulations that cut greenhouse gases directly at the source. It undermines – instead of enables – our state’s ability to meet our 2030 targets under SB 32 and in essence overturns AB 197.”

Big oil loves being in charge

How can this be happening in a state with an overwhelming Democratic legislature and a governor lauded as a global climate leader? You have to understand the total dominance that Big Oil has in the state.

I first became aware that something wasn’t right in the state of California at an Annual Legislative Fisheries Forum at the State Capitol in March of 2009.

As I listened to testimony from the public about the controversial Marine Life Protection Act (MLPA) Initiative to create “marine protected areas” in California, my ears perked up when John Lewallen, a longtime North Coast environmental leader, author, and seaweed harvester, complained that an oil industry lobbyist was overseeing the creation of marine protected areas.

I was stunned. After he spoke, I asked Lewallen, “What’s the lobbyist’s name?” He told me, “Catherine Reheis-Boyd, President of the Western States Petroleum Association. Look it up on the DFG website.”

I looked her up — and saw that she was on the MLPA Blue Ribbon Task Force for the North Central Coast, as well as for the South Coast. I was appalled by the fact that an oil industry representative with such an enormous conflict of interest was on a task force to “protect” the ocean, along with a coastal real estate developer, marina corporation executive and others with big conflicts of interests.

As it turned out, several months later Reheis-Boyd became BOTH the President of the Western States Petroleum Association (WSPA) and the Chair of the MLPA Initiative South Coast panel.

While state officials and corporate environmental NGO leaders touted the process as “open, transparent and inclusive” and saw no problem with having an oil industry lobbyist at the helm of marine protection in California, Tribal leaders, fishermen, grassroots environmentalists, and public trust advocates criticized state officials for allowing an oil industry official and others with conflicts of interests to oversee a process tasked with creating “marine protected areas.”

The worst fears of MLPA Initiative critics were realized in December 2012 when the Brown administration completed a series of “marine protected areas” on the California Coast that fail to protect the ocean from oil drilling, fracking, oil spills, pollution, military testing and all human impacts on the ocean other than sustainable fishing and gathering.

Background: Happy World Oceans Day – how big oil effectively runs Cali’s marine protection areas

Big oil on troubled waters

Then in August 2013, an Associated Press and FOIA investigation revealed that the oil industry had conducted over 203 fracking operations in waters off the California coast during a 20-year period, including the period from 2004 to 2012 that Reheis-Boyd had served on the MLPA task forces fro the South Coast, Central Coast, North Central Coast and North Coast.

Since that time, I have written many articles documenting the power of Big Oil and WSPA on this website and elsewhere. I’ve found that the state’s appointment of oil and energy officials, as well as Big Ag interests, to serve on the state’s regulatory panels and agencies has increased dramatically in recent years under the Arnold Schwarzenegger and Brown administrations.

Background: Big oil lobbying money turns California the WRONG kind of green

In spite of California’s reputation as a “green leader, Big Oil is the largest corporate lobby in the state and exerts enormous influence over the Governor’s Office, Legislature and regulatory agencies.

As usual, the California Oil Lobby was the biggest spender in the 2015-16 legislative session, spending an amazing $36.1 million as of December 31, 2016.

The spending amounts to $1.5 million per month — nearly $50,000 per day — over the last two years. The $36.1 million surpassed the $34 million spent in the prior session, according to an American Lung Association report. “That’s enough money to buy 103,000 goats,” reported Stop Fooling California,

The Western States Petroleum Association (WSPA) was the top overall oil industry spender during the 2015-16 session, spending $18.7 million. As is normally the case, WSPA ranked #1 among all lobbying spenders this session

Chevron, the second overall oil industry spender, spent $7 million in the 2015-16 session. It spent $3 million in 2016, sixth among all lobbyists in the current session.

In the seventh quarter alone, WSPA dumped $2.6 million into lobbying legislators and state officials, but at least this time the green side fought back – billionaire environmentalist Tom Steyer’s Next Generation Climate Action spent an unprecedented $7.3 million, almost 3 times the oil industry group’s expenses.

The spending by Steyer’s group helped propel the passage of Senate Bill 32, legislation that reduces greenhouse gas level to 40 percent below 1990 levels by 2030, in spite of strong opposition by the oil industry.

Since the 2007-08 Session, the oil industry has spent $133 million in lobbying in California.

To read the complete report, go to:

Action! What can you do?

Walker Foley, the Southern California Organizer for Food & Water Watch, urges you to call your California State Senator today and tell them to oppose AB 398.

(Oil Field image by Center For Biological Diversity.)

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About the Author

Dan Bacher is an environmental journalist in Sacramento who focuses on California's water issues, a healthy environment for the salmon fishery of the Northwest, and the attempts by big agriculture and big oil to hog all the water.


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