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How Big Oil Spiked Jerry Brown's Climate Change Agenda

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As Governor Jerry Brown touted California’s environmental initiatives and prodded world leaders in Paris to embrace tougher environmental policies during the United Nations summit on climate change, it was instructive to look back at how one of Brown’s top environmental priorities suffered a major defeat in the California Legislature this year.

That priority was to establish a 50 percent reduction in petroleum usage in cars and trucks by 2030. Brown’s failure to win its passage in an overwhelmingly Democratic Legislature clearly illustrates not only the influence of the fossil fuel lobby, but also the continued rise of a new breed of Democrats who are exceedingly attentive to big business, while tone-deaf toward their party’s traditional progressive base.

Petroleum reduction was a key part of a proposed law, introduced as Senate Bill 350, which also called for steps to increase energy efficiency in existing buildings and require that 50 percent of California’s energy come from renewable sources, such as solar and wind. By any definition SB 350 was a landmark piece of legislation. It had the rock-solid support of environmentalists, numerous health and physicians groups, and two Nobel Prize winners.

In hindsight, however, it probably didn’t stand a chance, thanks to an intense, summer-long lobbying campaign and media blitz by Big Oil and others. State filings show that oil companies and their trade organizations opposed to the petroleum reduction measure spent $10.7 million in the third quarter of 2015 to lobby lawmakers and conduct a negative media assault. Of that, the Western States Petroleum Association, an influential industry trade group, spent $6.7 million, more than twice as much as it had spent in the previous two quarters. Individual oil companies, such as ExxonMobil and Valero, also spent hundreds of thousands of dollars in the third quarter, a significant increase over the amounts they spent on lobbying earlier this year.

In contrast, among the bill’s supporters, NextGen Climate, an environmental group founded and headed by philanthropist Tom Steyer, spent nearly $1.2 million on lobbying in the third quarter.

By late summer, the industry’s lobbying campaign and media blitz attacking SB 350 had had a big impact. Faced with defections by a group of nearly 20 so-called moderate Democrats, led by Fresno Assemblyman Henry Perea, SB 350 backers reluctantly removed the petroleum reduction measure. The move followed two critical meetings between supporters of the bill and the group of about 20 moderate Democrats concerned about the petroleum reduction measure. At the first meeting, on August 24, the moderate Democrats, led by Perea, met with then-Assembly Speaker Toni Atkins (D-San Diego). At the second meeting, on August 31, the same group met with officials at the governor’s office. (Perea announced this month that he is leaving the Legislature a year before his current term expires.)

Many of the corporate-friendly Democrats who attended those meetings with Atkins and Brown have received substantial campaign contributions from Big Oil over the years. Perea, for example, has received almost $100,000 in campaign contributions from the oil and gas industry, while Merced Assemblyman Adam Gray has received about $80,000 and Rudy Salas, an Assemblyman from Bakersfield, has received about $65,000, according to a story in the Los Angeles Times citing the National Institute on Money in State Politics.

On September 9, with only two days left in the legislative session, Brown, Atkins and Senate President Pro Tem Kevin de León (D-Los Angeles), announced they were dropping the petroleum usage provision from the bill. The California Chamber of Commerce, another powerful opponent of the measure, then removed its influential “job killer” tag from the bill, sending a clear signal to corporate-friendly Democrats that it was now permissible to support SB 350.

A watered-down bill soon passed, with all of the formerly recalcitrant Democratic lawmakers except Gray voting for it. Brown signed it into law in a ceremony in October at the Griffith Observatory in Los Angeles.

“The main takeaway regarding the loss of the petroleum reduction piece of SB 350 is that it allowed us to shine a bright light on unprecedented oil industry spending [intended] to protect their bottom line – along with the lengths some lawmakers will go to ignore what voters truly want, which is less dependence on petroleum,” Susan Frank, director of the California Business Alliance for a Clean Economy, tells Capital & Main.

The alliance, a network of 1,300 mostly small and mainstream companies in California that support a clean energy economy, was an important backer of the bill. Frank adds that it wasn’t a total loss, citing the stronger renewable energy and building efficiency standards that survived.

 

Les Clark, executive vice president of the Independent Oil Producers Agency, an industry trade group based in Bakersfield, says he was adamantly opposed to the petroleum reduction provisions of SB 350 because they would have significantly hurt anyone who produces oil, particularly the mom-and-pop operators he represents.

“We were opposed to it,” Clark tells Capital & Main. “If you produce oil, you are producing it to make money. Of course we’d be concerned about that.”

Clark claims the measure could have driven some smalltime oil producers out of business. “It’s not good for my neighbors to have to pack up and go back East to find a job,” he says.

In speaking against the petroleum reduction measure, the bill’s opponents warned that it could result in gas rationing and prohibitions on sport utility vehicles. Opponents, including some Democratic lawmakers, also claimed that cutting petroleum use would be disproportionally harmful to residents of the Central Valley, whose long commutes and dearth of public transportation make dependence on automobiles – and fuel – a certainty.

“In the Valley – more than anywhere else in California – that means reducing jobs, businesses and opportunities,” Assemblyman Adam Gray wrote in an opinion piece published in the Merced Sun-Star. “The Valley’s No. 1 industry, agriculture, is dependent on transportation by both trucks (produce) and cars (labor). We have some of the highest levels of poverty and unemployment in the nation. Yet SB 350 puts these disadvantaged communities first in line to pay more and offers nothing in return.”

Sarah Rose, chief executive of the California League of Conservation Voters, disagreed, and in an interview confirms that the opposition of several key Democratic lawmakers to the petroleum reduction measure appears to have been motivated more than anything by a desire to please Big Oil.

“Clearly, there’s a problem when you have legislators not voting in the best interests of their constituents,” says Rose, whose organization supported SB 350.

“Oil has won a skirmish,” Brown conceded at the September 9 press conference, while de León added that the measure’s proponents were unable to compete with Big Oil’s “bottomless war chest.”

Now, three months later, after the governor promoted California’s accomplishments in a weeklong series of events at the Paris climate change conference, Brown can only look back and regret what was clearly a lost opportunity in Sacramento.

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  • Stephen Harris

    Mr. Cohen did a pretty good job of reporting the CA democratic side of the situation, and not so good job at reporting the other side of the issue. The entire narrative is based upon some sinister attempt by petroleum companies to “harm” the environment and “influence” legislators. The way most of us that work for a living see it, the progressives NEVER take into account the fiscal priorities and the cost of their utopian blather and eventually such duties are left to business folks, essentially those that can at least balance a check-book, something our gubner never has done. I am surprised that the petroleum lobby groups spent only 8 times more than the Steyer opponents, as these days, for even a small voice of prudence or sanity to be heard, it takes at least spending 10 to 20 times more than the entrenched one-party rule in Sacramento to change their minds. For too long the Dims have had little or no brakes on their absurd spending and all that is left to stand in their way of spending taxpayer money is the occasional “call to arms”: from a particular vilified industry that is on their menu that day. When CA returns to a two party rule, a lot of this pc madness will stop, but until then, kudos for the petroleum industry in pointing out the madness of the Climate Chaos crowd and the cost of the minority “middle class” that now is further burdened with abject ignorance and incompetence of the politicians. No wonder CA only gets meaningful laws passed when they go to referendums and bypass the sycophants in Sacramento. Maybe reporter Cohen could write an objective piece one day, just for kicks?

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