The oil industry more than doubled its spending on lobbying and campaigning in California last year, as the Jan. 1, 2015 date approached for gasoline to be included in the state’s cap-and-trade program. It’s part of a long trend of attempting to influence California policy that makes Big Oil the biggest lobbyists in the Golden State.
The oil industry and its allies have a long history of decrying regulations that protect public health and the environment. They holler about revenue losses, soaring energy costs, sky-high gas prices, an uncertain business climate, mass exodus of industry, basically THE END OF THE WORLD AS WE KNOW IT… which never seems to happen.
We heard all throughout last year – that on January 1, 2015, gas prices would soar.
• “Starting January 1, 2015, Californians will pay 16 to 76 cents more per gallon…”
• “This new mandate will increase fuel costs by 4% to 19%, or 16 to 76 cents per gallon at the pump.”
• “California will lose more than 18,000 jobs and $2.9 billion of economic output next year alone…”
• “We can’t afford a new double-digit gas tax…”
• “This new cost at the pump could push California over the fiscal cliff again and … back into recession.”
What’s really happening with gas prices?
• “The increase was so small and happened so fast that almost no one noticed,” reported the San Francisco Chronicle.
• “California did see a little bump … but it’s being washed out by the larger trends in the oil market,”i concluded James Bushnell, UC Davis economist.
• There was no price spike, not like in 2012, when the Chevron Richmond refinery fire caused prices to jump 30 cents per gallon almost overnight.
• By reducing demand for oil and providing drivers with more fuel choices, households will reduce their transportation fuel bills by $380 a year, growing to $850 in savings by 2020 and ballooning to over $2,000 annually by 2030.ii
• By 2020, consumers will pay 30% less in overall fuel expenses because policies like AB32 move us towards cleaner and more efficient transportation.
Why all the hype? Because claiming catastrophe is just what industry does.
• Take another California policy example. Some industry groups said a Clean Cars Program would serve to ban SUVs, reduce vehicle safety and performance and limit choice.iii
• “Californians are not going to get any health benefits, emissions benefits, etc., from these regulations.” iv
What really happened?
• The national 54.5-mpg fuel economy standard was based on California’s Clean Cars Program.
• In 2014, California surpassed 100,000 plug-in car sales, setting a new world record.v
• Tesla Motors has resurrected auto manufacturing in California.
• Analysis has found that California drivers will save 1.6 billion gallons of gasoline and $4 billion at the pump by 2016, while reducing 14 million tons of pollution.
And the automakers? Today, they support clean cars and clean fuels.
• “For greater energy security, automakers must continue producing advanced diesels, hybrids and vehicles powered by biofuels, electricity and hydrogen.”
• “Automakers support a national program for fuel economy and carbon dioxide that increases fuel economy,” says the Alliance of Automobile Manufacturers.vi
• “Automakers support a widely available range of energy sources including biofuels, clean diesel, electricity and hydrogen to reduce the carbon footprint of transportation fuels.”vii
We heard similar threats from industry about California’s cap and trade program.
• “… [Cap and trade] would raise energy costs, harm the economy and impact California’s competitiveness.”viii
• “These policies will create a large but hidden tax on families and will add new burdens to the fragile state economy.”ix
• “Small business will get hit from all sides. Consumers will have less money…”x
• “This poses great risks to manufacturers and other firms.”xi
What’s really happening to California’s economy?
• California’s economy is thriving and per capita carbon emissions have dropped 17% since1990.xii
• Per capita annual income in California was estimated to have increased by $1,700 in 2014, to $50,338.xiii
• The California economy expanded in 2014 by almost every measure and is set to overtake Brazil as the world’s seventh-largest economy, with even stronger growth anticipated from 2015–2017.xiv
• “California is growing faster than the U.S. economy, which is a bright spot in the global economic situation.” Prof. Sung Won Sohn, California State University Channel Islands.xv
• Unemployment is set to continue its decline through 2018, while the GSP is set to rise 3.4% over 2015 and accelerate to 3.8% in 2016.xvi
• $1.6 billion flowed in to the state’s clean tech sector in 2013.xvii
• California is the epicenter of the U.S. clean tech marketxviii and has the largest advanced energy industry in the United States, employing over 430,000 workers.xix
• California manufacturing leads the nation, with the highest total manufacturing output of any state.xx The manufacturing sector has grown in the past year and is projected to continue to do so in 2015–2016. Prior to 2010, before AB32 began having positive economic impacts, the sector was in a state of decline for a decade.xxi
• California leads U.S. states in agriculture, technology and manufacturing revenue growth, according to Bloomberg economic data.
• The LCFS alone can contribute at least 9,100 new jobs in an industry with a strong future, and potentially many more if the state attracts more clean fuel production facilities and technology providers.xxii
• Right now, more than $872 million in proceeds from the Greenhouse Gas Reduction Fund are flowing back to California communities into programs designed to benefit all Californians, like affordable housing, sustainable communities, natural resources protections, low-carbon transit operations and energy efficiency. In 2016, it’s predicted that $1 billion in proceeds will be available for investment.xxiii
• By law, a minimum of 25% of proceeds go towards projects that benefit disadvantaged communities, enhancing equity in the state.
i David Baker, Fears of a Hidden Gas Tax Vastly Overblown, http://www.sfgate.com/business/article/Fears-of-a-hidden-gas-tax-were-vastly-6021148.php
ii S. Mui, NRDC blog. http://switchboard.nrdc.org/blogs/smui/why_gov_browns_goal_of_cutting.html
iii California Clean Cars Campaign, Automakers Cry Wolf Again.
viii 13 things to know about California’s cap-and-trade program, Dana Hull, San Jose Mercury News, February 22, 2013, http://www.mercurynews.com/ci_22092533/13-things-know-about-california-cap-trade-program
ix Jack Stewart, President, California Manufacturers and Technology Association
x John Kabateck, Executive Director, National Federation of Independent Business/California 2012
xi Jack Stewart, President, California Manufacturers and Technology Association
xii 2014 Green Innovation Index, Next 10.
xiii Michael B. Marois and Shin Pei, California Zooms Past Russia, Italy and Soon Brazil in Economic Might, Bloomberg, Jan 15, 2015. http://www.bloomberg.com/news/2015-01-16/brown-s-california-overtakes-brazil-with-companies-leading-world.html
xvi California economy continues steady improvement, Sep 11, 2014, University of the Pacific. http://www.pacific.edu/About-Pacific/Newsroom/2014/September-2014/California-and-Metro-Forecast–September-2014.html
xvii Next 10, 2014 California Green Innovation Index, http://next10.org/policy-clean-tech-innovation-accelerate-consumer-demand-spur-additional-economic-growth
xviii 2013 US Clean Tech Leadership Index
xix AEE Institute, https://www.aee.net/articles/california-has-largest-advanced-energy-industry-in-u-s-with-over-430-000-workers-according-to-first-ever-state-employment-survey
xx 2014 State Manufacturing Data Table, National Association of Manufacturers.
xxi Michael B. Marois and Shin Pei, California Zooms Past Russia, Italy and Soon Brazil in Economic Might, Bloomberg, Jan 15, 2015. http://www.bloomberg.com/news/2015-01-16/brown-s-california-overtakes-brazil-with-companies-leading-world.html
xxii ICF International, California’s Low Carbon Fuel Standard: Compliance Outlook & Economic Impacts, April 2014. http://www.caletc.com/wp-content/uploads/2014/04/ICF-Report-Final-2.pdf