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Proposition 23: the Real Story

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Here Comes Big Oil

Seth Joel

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Big Oil is taking the political stage once again in California. This time the industry is weighing in on Proposition 23, the initiative that would delay implementation of AB 32--California's new greenhouse emission law--until unemployment in the state stays below 5.5 percent for four consecutive quarters. Inasmuch as the current unemployment rate is north of 12 percent, passage of Proposition 23 could postpone implementation for years, maybe decades.

That would suit Big Oil just fine. Inasmuch as the heart of AB32 focuses on carbon emissions, the oil industry has a lot at stake. From their perspective, once in place AB32 will lessen reliance on their emissions-yielding products. As for whatever "green" jobs might be created in a less polluted environment, well, that's just not their concern.

To facilitate success, Big Oil is pouring money into the "Yes on 23" campaign. Proponents have raised $8.2 million and counting. And 97 percent of that money has come from oil industry companies.

The lion's share of the money has been donated by out of state interests. The thinking is if the oil lobby can stop the environmental movement in California, that good fortune will spillover to other states not to mention pending congressional legislation.

This isn't the first time that Big Oil has responded to a big threat in California. In 2006, the industry spent more than $100 million to defeat Proposition 87, a proposal that would have taxed oil somewhere between 1.5 percent and 6 percent, depending upon the price of the commodity. As such, California remains the only major oil-producing state without an oil severance tax. That success has continued. With California struggling to find new revenues for an out-of-balance budget, Big Oil has defeated one legislative attempt after another to tax production.

Now, Big Oil is taking the offense instead of the defense. IfProposition 23 passes, the industry will yet again demonstrate its might in California's interest group-laden environment. And with so much at stake, it's likely that Big Oil will finance its effort mightily between now and election day.
 

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