Unmasked: The Oil Industry Campaign to Undermine California’s Clean Energy Future

  • A variety of climate and clean energy measures that are part of California’s landmark Global Warming Solutions Act of 2006 (AB 32) are reducing California’s oil dependence, transportation costs, and pollution-related health bills. But with the petroleum fuels sector scheduled to begin paying for its portion of climate pollution in January 2015, oil companies have intensified their campaign to undermine the clean energy policies that will reduce their market share.
  • NRDC has identified at least eight front groups appearing to be grassroots organizations speaking for consumers or broad coalitions, but they have strong ties to the oil industry. Oil companies such as Chevron, Shell, ExxonMobil, BP and ConocoPhillips are working against California’s clean energy policies, often through the industry’s trade association, the Western States Petroleum Association (WSPA).
  • The oil companies’ campaign to maintain their profits and continue California’s dependence on petroleum-based fuels has been supported by more than $70 million of oil money spent on lobbying in California since 2009.
  • Reversing or delaying the scheduled inclusion of transportation fuels — which account for nearly 40 percent of California’s climate pollution — under the state’s emissions cap, as the oil industry and its front groups advocate, would undermine clean energy progress, keeping Californians more dependent on oil and more vulnerable to roller-coaster gas prices.

California’s Climate Policies Reduce Dependence on Oil

California’s Global Warming Solutions Act (AB 32) has put the state on a pathway to reduce harmful carbon pollution to 1990 levels by 2020 and beyond. By 2030, AB 32’s clean energy policies will enable California to:

  • Save more than $2,000 per household on gasoline each year due to more efficient cars that go farther on a gallon, greater fuel competition, cheaper fuels like clean electricity, and better access to transit;
  • Reduce carbon pollution by 150 million tons every year compared with business as usual, which is equal to halving the emissions of all cars and trucks on the road in California;
  • Eliminate 14 billion miles driven annually, thanks to more sustainable communities with walkable neighborhoods and expanded public transit; and
  • Save well over $8 billion on health care costs due to fewer asthma attacks, cardiac hospitalizations, and premature deaths from poor air quality.

The Oil Industry’s (Renewed) Campaign Against AB 32

California’s transportation fuel providers are slated in January 2015 to join the state’s other major polluting industries (such as power plants and cement factories) already under the cap-and-trade emissions limits. Including the emissions from transportation fuels like gasoline under the statewide cap has been in the works for almost a decade.

The cap-and-trade system places an upper limit on greenhouse gas emissions (cap) and requires polluters to either reduce their pollution or buy or trade a diminishing number of pollution allowances (trade). The proceeds from selling pollution allowances to large emitters fund projects that further reduce emissions in California, and at least one-quarter of the funds must benefit disadvantaged communities, which are disproportionately affected by climate pollution.

Rather than investing in cleaner sources of energy, more efficient production and refining processes, and less-polluting products that would reduce climate pollution and improve air quality for California’s residents, the oil industry has invested in a front group-led marketing campaign to avoid being held accountable for its pollution. Since 2009, the oil companies have spent more than $70 million on lobbying in the state.

A Better Future Is Possible

Despite the oil industry’s opposition, Californians and their elected leaders are engaged in building a better future, with clean and affordable solutions that reduce dependence on oil. AB 32 invests the proceeds from pollution permit sales in programs that will cut carbon pollution and reduce Californians’ fuel bills, with an emphasis on projects that deliver benefits to the state’s most disadvantaged communities. Californians should see the oil industry’s latest campaign attacking AB 32 for what it is: a thinly veiled attempt to maintain their share of the market and avoid responsibility for the fuel sector’s climate pollution.

Big Oil’s ‘Grass-Roots’ Groups in California

pol_climate37__01__970-630x420When oil companies mounted a public campaign in 2010 to roll back California’s nation-leading greenhouse gas restrictions, the effort backfired in a big way: 62 percent of the state’s voters rejected Proposition 23, which would have suspended California’s goal of slashing carbon emissions by the end of the decade. It was a major setback for the industry and strengthened the resolve of environmentalists and politicians to discourage the use of fossil fuels. On Jan. 1, 2015, the state’s cap-and-trade system is scheduled to expand to include gasoline, diesel, and other fuels used for transportation, which the California Air Resources Board estimates are responsible for 36 percent of greenhouse gas emissions.

Once again the oil industry is suiting up. The restrictions will cripple the economy and cost jobs, lobbyists say. But instead of making a direct plea to the public for support to delay or repeal the changes, oil companies are quietly working to make it look like Californians are spontaneously rising up in protest against the climate standards. In recent months, groups have popped up that appear to be grass-roots organizations started by ordinary people opposed to the rules. In fact, they’re paid for by the oil industry.

The most active group, the two-month-old California Drivers Alliance, describes itself on its website as a “movement of motorists, small businesses, fuel providers, and consumers.” It’s been running a slew of online ads, radio spots, and bold-faced ads in newspapers across the state, urging readers to “Stop the Hidden Gas Tax.” Mirroring an oil industry claim, the ad says the regulations will “increase the cost of gas between 16¢ and 76¢ per gallon.” One online video features a Hispanic mother of two who says she works for a nonprofit that helps immigrants and can’t afford to drive her car to work. “Many Latino families who only make minimum wage, we just honestly can’t afford for gas prices to go higher,” she says.

Asked where the alliance gets its money, spokesman Jerry Azevedo says the group’s funding comes from the Western States Petroleum Association, whose members include BP (BP)Chevron (CVX)ExxonMobil (XOM), and Shell Oil (RDSA:LN). He wouldn’t say how much money the alliance had received. WSPA didn’t reply to numerous messages seeking comment.

Another group, Fed Up at the Pump, says it’s a “grass-roots coalition of consumers, businesses, and advocates who are concerned about the negative impacts that a hidden, regressive gas fee will have on California.” It started a letter-writing campaign this year targeting Democratic Governor Jerry Brown. Like the alliance, it stresses the prospect of gas price hikes using the same numbers and wording—that Californians starting next year will pay up to 76¢ more per gallon. “Governor Brown,” concludes a prewritten letter people can send through the group’s website, “you must find a way to address climate change without hurting those of us already struggling to get by.”

In a recent poll, 76 percent of Californians supported the greenhouse rules …

Fed Up lists retail, manufacturing, farming, and trucking groups among its four dozen members. The four-month-old organization is the creation of a petroleum trade group called the California Independent Oil Marketers Association, which is made up of small and midsize oil distributors and retailers. Jay McKeeman, a spokesman for the California Independent Oil Marketers Association and for Fed Up, says the group’s goal is to pressure Brown to delay the January rules. “Let’s have a public debate about this with full participation of fuel consumers,” he says.

The groups echo the oil industry’s contention that the regulations amount to a “hidden gas tax”—though there’s not much hidden about it. In 2010 a California Air Resources Board report publicly estimated that cap-and-trade rules could raise gas prices 4 percent to 19 percent by 2020. The oil groups applied those percentages to today’s gas price of $4 per gallon to arrive at the ubiquitous 16¢-to-76¢ figure.

Severin Borenstein, a professor at the University of California at Berkeley’s Haas School of Business, says those numbers don’t add up. A study he conducted in August puts the price increase at 9¢ to 10¢ per gallon, the difference between driving a car that gets 30 miles per gallon instead of 31. “There’s a lot of hyperbole coming out of the oil industry,” he says. Azevedo of the California Drivers Alliance sticks by his group’s numbers and says, “We’d welcome a new analysis from the Air Resources Board.”

The climate rules, signed in 2006 by Republican Governor Arnold Schwarzenegger, require the state to reduce its greenhouse gas emissions to 1990 levels by 2020. The industry’s stealthy campaign to reverse or slow the regulations appears to be a long shot at best. A bill that would have delayed the January rules died in the state senate in August in the face of public support for the regulations.

… but that number dropped to 39 percent if it meant higher gas prices

The oil-backed groups have shrewdly focused their efforts where support for the rules is softest: low- and middle-income Californians who worry about high gas prices. Overall the climate policies remain very popular—76 percent of Californians agree that oil should be included under the new greenhouse gas rules, according to a July poll from the Public Policy Institute of California, a nonprofit think tank. However, when those people were asked whether they were in favor of the rules if it meant higher gas prices, public support tumbled to 39 percent. For the oil industry and its proxies to have a chance at getting what they want, says Mark Baldassare, president of the policy institute, “this has to be about working families.”

http://www.businessweek.com/articles/2014-09-04/californias-carbon-laws-oil-companies-fund-grass-roots-revolt

AB32 helps California move forward on curbing emissions

By CONRAD ANKER | August 29, 2014

When climbers team up to scale a big peak, they share the goal of making it to the summit. Success rests on training, detailed planning, clear communication, using the best available technologies and a bit of luck with the weather. If all line up, one might make the summit.

These values are at the core of The North Face, the company I have worked with for the past 31 years.

The challenges California faces with climate are our metaphorical summit. We have the foundation of planning and communication to achieve cleaner air without compromising economic growth. What we are lacking is a tool that will help us. One set of tools is AB 32, California’s pioneering clean-energy and climate law.

The North Face is among the many California companies representing various sectors of the economy that have sent representatives to Sacramento to voice support for AB 32. Our message to legislators: AB 32 is working. Let’s keep pushing forward, and stay on schedule.

That means no delay in bringing transportation fuels under the statewide emissions cap – an idea now being considered. Exempting the oil industry from taking responsibility for its emissions risks the economic and environmental progress our state has been enjoying.

AB 32 is delivering cleaner energy, healthier air and less pollution – all while our economy continues to grow. It’s helping California maintain leadership in the fast-growing clean-energy sector: A conservative accounting of our state’s clean economy found that jobs in this sector grew 20 percent from 2002 to 2012.

California policies, including the Low Carbon Fuel Standard, are driving more alternative fuels into the marketplace, boosting efficiency, spurring innovation and investment, diversifying our energy portfolio and building our resilience to gas price spikes. It’s no accident California retailers sold 523 million fewer gallons of gasoline in 2012 than they did in 2009, even as the economy grew. Those hundreds of millions of gallons of gasoline represent millions of dollars Californians have been able to spend at places other than the gas pump.

The transportation sector is California’s biggest source of greenhouse gas emissions. Any legislative effort that suggests the oil industry can delay curbing its carbon pollution, while the state’s other industries work to cut emissions, doesn’t make sense. Doing so would shift the oil industry’s share of responsibility for cleaning up its product to other sectors of the economy and to consumers.

Air pollution and climate change are serious problems, and voters support action, including cleaner fuels. In fact, 81 percent of Californians – including 69 percent of California conservatives – support requiring oil companies to produce transportation fuels with lower emissions.

We know that when it comes to protecting the community you serve, it is your duty to comply. That’s true even if there’s a cost. Profitable, well-run companies from the building sector to apparel to health care have to follow the rules and produce a safe product or service.

We’re doing our part, and our business is seeing economic benefits. The North Face headquarters building is LEED Platinum certified and produces 116 percent of its electricity needs through solar panels and wind turbines. Rather than paying an electric bill, we get money back from our utility for the extra renewable energy we generate. The facility also includes eight electric vehicle charging stations, and employees who drive electric vehicles to work are saving money on gas and saving time in the HOV lanes. California’s incentives for energy efficiency, renewable energy, and clean transportation were important factors as we considered these steps. These projects would not have happened without California renewable energy policies like AB 32 in place.

Companies have a choice about how to address the cost of doing business safely and whether or not to pass all that cost on to customers. The top five oil producers earned $93 billion in profits last year. This is not an industry without options.

Our company is proud to be part of the economic powerhouse that is California – the eighth largest economy in the world. We appreciate the opportunities AB 32 has created, and the clear market signal it sends. It is putting California businesses on a level playing field.

Making the summit is going to require astute leadership and the right set of tools. AB 32 is good for business and good for our health. Let’s keep it up.

Anker is a fifth generation Californian from Tuolumne County. He has summited Mt. Everest three times and is the Athlete Team Captain for The North Face, a member of Business for Innovative Climate and Energy Policy (BICEP).

 

Read the full article at The Modesto Bee →