How Oil Lobbyists Continue to Exert Influence on California Regulators and Lawmakers

While Gov. Gavin Newsom and other California leaders trumpet the state’s progress on reducing emissions, emails obtained by Capital & Main show that the oil and gas industry continues to exert influence over critical climate policy. With the Legislature poised to consider far-reaching legislation in the next few months, the industry’s sway with both elected officials and regulators threatens to undermine the state’s efforts to address climate change.

An email exchange from last spring, obtained by Capital & Main through a records request, confirms that the industry was able to win a subtle but significant change to a bill that would have codified California’s 2045 net-zero greenhouse gas emissions goal into law before it even went to a committee hearing. The legislation would put the force of law behind the emissions goal set in an executive order issued in 2018 by former Gov. Jerry Brown, and would also mandate the state maintain net negative emissions thereafter. The bill is up for reconsideration this year. Several other states have already passed laws for net-zero emissions by midcentury.
 

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Soon after oil and gas lobbyists reached out to staff of the bill’s author, Assemblymember Al Muratsuchi, the bill was changed to give the industry greater discretion for how to meet emissions targets. In an email following their discussion, a legislative staffer outlined the changes to Margo Parks, a lobbyist for the Western States Petroleum Association (WSPA), and several other oil and gas lobbyists.

Specifically, the changes removed a provision mandating that 90% of emissions reductions be achieved only through actual cuts to pollution, rather than carbon dioxide removal. According to Muratsuchi, the bill was likely altered after Susan Chan, the chief consultant for the Joint Legislative Committee on Climate Change Policies who was in contact with various interested parties, discussed proposed changes with one or more lobbyists.

Parks forwarded the outlined changes to David Garcia, the legislative director for the California Air Resources Board; it’s unclear whether they had discussed the bill previously, though CARB is the state’s authority on monitoring and regulating emissions. The bill eventually failed, in no small part because of the industry’s continued opposition since it barred captured carbon from counting toward emissions goals if later used to recover new oil.

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Though the bill will be up for a vote again this session, environmental advocates worry that the industry could again exert its influence to change it in significant ways — and that the industry may try to enlist other allies, such as regulators at CARB.

Martha Argüello, a prominent environmental justice advocate based in Los Angeles who sits on CARB’s Environmental Justice Advisory Committee, criticized the agency for letting the industry control how it reaches emissions goals.

Carbon capture and other market-based approaches are “the tactic used by the fossil fuel industry spending millions of dollars to delay real climate change solutions,” Argüello says.
 

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Another email exchange more explicitly shows how oil lobbyists can lean on regulators to drum up support for their favored policies in the legislature, even as a growing chorus of independent experts, legislators and activists say deep and direct emissions cuts are increasingly necessary to stave off the worst forms of climate catastrophe.

One day after the highest-ranking California senators released their budget priorities last April — meant to inform the governor’s final budget and other ongoing priorities — Parks, the WSPA lobbyist, encouraged CARB’s Garcia to find out why the senate was seeking reforms to the state’s cap-and-trade program.

The program, which is overseen by CARB, relies on a market-based approach for the state to reach emissions targets. Oil and gas companies can continue producing and refining oil and gas so long as their emissions are covered under various permits or credits meted out by CARB, which has aroused criticism from many environmentalists. But in recent years, the agency has resisted calls for reform.

Under the program, CARB issues or auctions off a set number of “allowances,” or permits to emit one ton of carbon dioxide equivalent, to large greenhouse gas polluters. The allowances can be traded among private businesses or they can be “banked,” meaning a polluter can save them to cover future emissions. Critics say CARB has issued too many allowances for free to the oil and gas industry, letting it off the hook when it comes to reducing pollution. Even the agency’s inaugural director, Mary Nichols, warned that cap-and-trade wasn’t reducing emissions fast enough.

Three of the most vocal proponents of reforming cap-and-trade in the legislature are State Sen. Bob Wieckowski (D-Fremont), Robert Hertzberg (D-L.A. County) and Josh Becker (D-San Mateo County). They sent a letter last year to CARB’s new director, Liane Randolph, urging changes to cap-and-trade and the related carbon offset crediting program after news reports found some credits weren’t tied to actual emissions reductions.

In 2020, Wieckowski proposed a budget appropriation for CARB to consider changes to cap-and-trade, but the request was rebuffed by California Environmental Protection Agency Secretary Jared Blumenfeld, whose department oversees CARB. Blumenfeld cited economic disruptions caused by the COVID-19 pandemic as a reason “not to rush” into reforms. The program, which normally brings in $700 million per quarter, ended the year with an $81 million shortfall.

In the emails obtained by Capital & Main, it appears that CARB’s Garcia was similarly resistant to reforming the cap-and-trade program — a policy aim he clearly shared with the oil lobbyist. In the exchange with Parks, Garcia wrote that the proposed reforms were “not what Jared promised” and said he would go “to Jared and the GO,” possibly references to Jared Blumenfeld and the governor’s office.

Neither Garcia nor Parks responded to questions, and CARB only sent Capital & Main Blumenfeld’s letter in response to an inquiry. Kevin Slagle, vice president of communications for WSPA, characterized the exchange as “very typical,” and implied that senators’ proposed changes to the cap-and-trade program were politically motivated — though the reforms have been suggested by a broad range of observers. To date, the program hasn’t been reformed in the ways suggested by last year’s senate budget priorities.

“When a politician says, ‘Hey, let’s do this,’ and a regulatory agency is blindsided as well as the industry, this is the type of communication that’s going to happen,” Slagle says.

The emails weren’t benign to Brian Nowicki, the Center for Biological Diversity’s California climate policy director, who says it was indicative of the industry’s tremendous influence “at every level.” In the first three quarters of 2021, WSPA — the largest oil and gas trade group in the state — spent $3.4 million on lobbying at all levels of government. That’s significantly more than expenditures by environmental and clean energy groups.

“It’s pernicious and pervasive and we need Governor Newsom to continue to speak clearly against this industry obstructionism,” Nowicki says.

 
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