Proponents of an oil severance tax on California oil producers routinely point to Alaska, which has the highest such tax in the nation, as clear evidence that a state government can extract disproportionately high taxes from a single industry with no impact on its economy.

Those folks might want to re-think that claim.

Faced with the stark reality that oil production – and associated tax revenues – in Alaska have been steadily declining for several years, the Alaska state senate this week voted to reduce taxes on the oil industry in order to increase production, jobs and revenues for the state.

Senators voting for the tax cut observed that tax policies are a major factor in investment decisions and Alaska’s current tax rates on oil production discourage investment.  The vote to reduce oil taxes was viewed as an essential step toward encouraging investment which would ensure a stable revenue stream to fund “maximum sustained benefit for the people of Alaska.”

An economist working for the state predicted that the tax cut would actually increase net revenues for Alaska, telling the senators: “Even a modest response from industry with new investment and production would more than offset the cost of the tax change to the state treasury over six years.”

In other words:  Lower taxes = more state revenue; higher taxes = less production and lower state revenues.

California lawmakers would do well to keep the Alaska experience in mind as they consider SB 241 (Evans) the 9.9 percent oil severance tax bill currently making its way through our legislature.  A study of a similar proposal a few years ago concluded the new tax would result in the loss of almost 10,000 jobs, a net decrease in state revenues, and the loss of millions of dollars in local revenues needed to fund K-12 schools.

California is now on the brink of potentially realizing billions of dollars in new revenues from the development of the Monterey Shale oil fields, without any changes to the existing tax structure.  Oil companies will have to invest heavily to access those resources. Rather than learn the hard way –as Alaska is now realizing – that raising oil taxes will discourage the very investment needed to grow productivity and profits, California can avoid that problem by recognizing it’s in the state’s interest to refrain from erecting barriers to the prosperity responsible oil production can bring.

Rejecting SB 241 would be a good first step.

There’s been a lot of excitement lately over the potential benefits of California’s Monterey Shale – a 1,700 square mile oil-bearing shale formation primarily in the San Joaquin Valley that contains an estimated 15 billion barrels of oil.

The excitement comes from a realization this oil, if prudently and safely developed, could dramatically change our state’s energy security picture for decades to come and usher in an era of unprecedented prosperity.

Those benefits have come into much sharper focus, with potential job creation in the millions, exponential economic growth, and billions of dollars in new tax revenue generation being projected in a newly-released study by leading academic economists from the University of Southern California. The study, Powering California: The Monterey Shale & California’s Economic Future concludes that over the period between 2015 – 2030, development of the Monterey Shale could:

• Create from 512,000 to 2.8 million new jobs;
• Increase California’s gross domestic product (GDP) by 2.6 percent to 14.3 percent on a per-person basis;
• Grow personal income by an average of 2.1 percent to 10 percent;
• Generate $4.5 billion to $24.6 billion in new tax revenues for state and local government services.

Clearly, the Monterey Shale is a game-changing economic opportunity that California can’t afford to ignore.  This opportunity is especially important to the communities in the San Joaquin Valley that have experienced extremely high unemployment and economic challenges for far too long.  The great San Joaquin Valley will be the primary beneficiary of the jobs, wealth and government revenues that will flow from the Monterey Shale.  It’s their time to flourish.

This opportunity has not escaped the notice of Governor Jerry Brown, who this week said he is confident his oil and gas regulators can and will protect the environment so hydraulic fracturing can unlock the “extraordinary” opportunities offered by the Monterey’s massive oil deposits.

Despite these promising developments, there are still those who would like to ban or unnecessarily restrict the practice of hydraulic fracturing based on emotional and unsubstantiated claims of risk to the environment and water quality.  As Governor Brown said, it is imperative the safety of hydraulic fracturing “be decided based on science, based on common sense and based on a deliberative process that listens to people – but also wants to take advantage of the great opportunities we have in this state.”

An honest appraisal of the science and common sense around hydraulic fracturing leads to a conclusion the technology we’ve used without harm in California for 60 plus years is safe and its benefits a blessing.

Oil drilling activities in California are strictly regulated by several agencies and the state’s oil producers are working closely with the government to develop even stronger protections to ensure the vast potential of the Monterey can be realized.  We are committed to continue working with regulators, the Legislature and any other groups and individuals who care about California’s economic wellbeing toward making the promise of the Monterey Shale a reality.

Last fall, gasoline prices in California shot up to record levels.  Some service stations in Southern California reportedly either ran out of fuel or stopped selling fuel.  And this all was occurring at a time when crude oil prices and U.S. national average prices were either stable or trending downward.

Consumers, the news media and government officials understandably wanted to know, “What the heck is going on?”

It was clear at the time there had been a number of unfortunate supply disruptions at refineries up and down the West Coast.  Supply disruptions often lead to market responses that result in higher prices at the pump.

A group called McCullough Research from Portland, Oregon, stepped into the picture and suggested that refiners might have been manipulating the market by holding back gasoline supplies as a way to push prices higher.  It was the kind of allegation that stimulates lots of media attention and interest among regulators and politicians.  It prompted several United States Senators to ask the U.S. Department of Justice to investigate.

Naturally, this report and media interest also got our attention.  We too wanted to know, as best we could, what had caused the market disruptions and whether or not there was any validity to the claims made in the McCullough Research report.  WSPA engaged the services of Stillwater Associates, a well-respected transportation energy consulting firm whose clients have included the Federal Trade Commission, several states’ Attorneys General and various other federal and state agencies.

We are pleased to report that Stillwater found the McCullough report lacked credibility because it had used inappropriate data in its analysis to reach incorrect conclusions.  According to the Stillwater analysis, “The McCullough report relies on incomplete research, poor analysis and speculation around company motives to conclude that a ‘federal agency should be given the regulatory authority to monitor and prevent the exercise of market power for oil’…”

Further, the analysis by Stillwater Associates concludes, “The gasoline price spikes of 2012 are entirely explainable using publically available data, are consistent with competitive market behavior, and are inconsistent with the McCullough paper’s contention that refiners may have agreed to allocate production targets in order to maintain higher prices.”

These findings don’t mean fuel users weren’t impacted by the price spikes we experienced last year.  But, as Stillwater demonstrates, that market volatility was directly and convincingly associated with unplanned refinery outages and supply disruptions that significantly impacted the very sensitive spot fuel market.  Fortunately, because the dynamics of supply and demand work well in competitive markets, prices fell quickly to near record low levels for the year when expectations of adequate supplies were restored. Actions by refiners to increase refinery utilization, coupled with Governor Brown’s intervention to allow for the early transition from the state-mandated summer to winter gasoline blend, contributed to that result.

We understand gasoline prices continue to be a subject of great interest to policymakers and the public alike, and hope this analysis will provide valuable insights on West Coast energy markets.

Click HERE to read the full report.

For the third year in a row, a Legislative Outreach Day for the WSPA Associates members in Olympia gave Washington lawmakers a chance to hear the voices of hard working men and women whose work supports Washington’s oil industry.

Why is this event important to Washington and WSPA members?  While the petroleum industry in Washington has a high profile, it often is characterized only as “Big Oil.” Policy decisions may not seem particularly relevant or important to everyday Washington residents.

The WSPA Associates represent the “rest of the story.”  They are the men and women who are, or who work for, vendors and contractors with business and professional ties to the petroleum industry in Washington.  Some are true mom and pop businesses owners whose livelihoods are closely connected to the petroleum industry and a healthy economy.  They are the men and women whose jobs are most at risk when legislators and regulators talk about taxing “Big Oil” or reducing the state’s petroleum consumption.

On January 30, WSPA Associates got together with lawmakers to exchange information, commentary and feedback on Washington’s future.  I am confident participation will continue to increase in the future as more and more WSPA Associates let their voices carry on issues vital to the economy and jobs in the state.

Governor Inslee’s Executive Director for Legislative Affairs and Policy, Ted Sturdevant, provided some insight into the Governor’s agenda for Washington and we look forward to continued conversations with him as more cabinet positions are filled and policies become more clear during the Governor’s first term.

Senator Doug Ericksen discussed his thoughts on the new coalition government in Washington’s state Senate, encouraging everyone to rethink advocacy and be more proactive.  This new bipartisan cooperation in the Senate may provide some unique opportunities unavailable to the business community in the past.

Marjorie Hatter, manager of the Phillips refinery in Washington, and Daniel Cameron, manager of the Tesoro refinery in Washington, offered their thanks to the Associates for assisting with advocacy on energy policies.  They urged the Associates to continue their participation in the legislative process by insisting on a level playing field in Washington to help create a strong economic future and certainty for our state.

This fantastic event gave WSPA members an opportunity to show the Associates their deep appreciation for the commitment the WSPA Associates program has to the petroleum industry in Washington.

It doesn’t feature international movie stars, enjoy nationwide commercial distribution, or have multi-million dollar backing from major Hollywood studios and wealthy investors.  But “FrackNation,” a new documentary produced on a shoestring budget funded by thousands of small donations could emerge as a powerful voice in the escalating debate over a technology that has the potential to rehabilitate our economy, create hundreds of thousands of jobs, and provide the United States and California with energy security for years to come.

According to a January 21 Associated Press article New documentary targets critics of fracking, “FrackNation” challenges the cinematic allegations promoted by opponents of hydraulic fracturing in widely distributed productions such as “Gasland” and the more recent “Promised Land.”

In what the New York Times described as a “methodically researched” effort, “FrackNation’s” producers bring to the screen information that raises serious questions about highly emotional but scientifically undocumented claims about the impacts of hydraulic fracturing on the environment, water quality and human health.

For example, “FrackNation” includes an interview with a respected UC Berkeley researcher who stated firmly there is no link between hydraulic fracturing and cancer. The film also documents the fact that areas in which the process is employed remain largely beautiful, with only the brief visual presence of wells and equipment.

Of great significance as well are the conversations with numerous rural residents who testify as to the economic benefits they’ve enjoyed as a result of leasing their land to natural gas drillers, at least one of which stated that his water and land were not harmed by a nearby gas well.

WSPA’s position on hydraulic fracturing is well known and well documented:  in the 60 years that the practice has been in use in California, there has been no evidence that it has caused harm to public health or to the environment.  Hydraulic fracturing is also subject to strict rules and oversight by various government agencies, with the industry working with regulators to further strengthen safety and transparency requirements.

And many independent economists and analysts have concluded that hydraulic fracturing can produce enough energy to meet not only the needs of American consumers but to make us a leading exporter, freeing us from dependence on unstable foreign sources, and ushering in a new era of prosperity which may solve many of our nation’s and our state’s fiscal challenges.

The public deserves to hear both sides of the hydraulic fracturing issue, and not just through the eyes of the entertainment industry. “FrackNation” has clearly struck a nerve with the Hollywood anti-fracking crowd.  The producer of “Gasland” apparently refused to defend his version when given the opportunity by “FrackNation’s” producers.

“FrackNation” brings necessary fact-based balance to the public conversation on hydraulic fracturing.  And importantly, it was made without the support of the oil and gas industry – the producers refused contributions from oil and gas companies and their executives.

But don’t take our word for it. We suggest you be the judge:  “FrackNation” will air on cable channel AXS and can also be purchased online.  For more information, visit www.fracknation.com.

In recent days, it has been disappointing to see activists dismiss the findings of a major study on the Inglewood Oil Field completely out of hand, and in some cases, before the results were even released.

This was, after all, a study that environmental and community organizations requested. It was required as part of a 2011 legal settlement that included Plains Exploration & Production Co. (PXP), L.A. County, Culver City and activist groups including the Natural Resources Defense Council and the Citizens Coalition for a Safe Community.

The activists along with all the other parties agreed to the process for conducting the study. They demanded that PXP pay for it. But now, a year later, some of the same critics who demanded the study are criticizing it on the basis that PXP paid for it.

Apparently they forgot they were in support of PXP paying for the study before they were against it.

I May Know Why

Maybe that is because the study makes it much harder for the activists to argue that hydraulic fracturing is an unsafe technology that must be banned. Among the report’s many findings, it concluded that hydraulic fracturing is being safely used at the Inglewood Oil Field, takes place 1.5 miles below the designated base of fresh water, has no impact on groundwater quality, and did not cause earthquakes.

For people who have genuine concerns and want a constructive discussion about the safety of oil and gas development, the release of the study is good news. But for the activists whose real motivation is force an end to domestic oil and gas production tomorrow, any report that doesn’t give people reason to fear hydraulic fracturing must be attacked.

The problem for the activists, though, is that even though the conclusions of this study are site-specific, they aren’t exactly new when compared with the scientific findings that have been of other experts on the topic of hydraulic fracturing in other parts of the country. In fact, they just reinforce what scientists, the state regulators who oversee most of the nation’s oil and gas development, and senior officials of the Obama administration have said for years – hydraulic fracturing is a safe technology.

For example, earlier this year, President Obama’s Interior Secretary Ken Salazar told Congress that “there’s a lot of hysteria that takes place now with respect to hydraulic fracking, and you see that happening in many of the states.” Salazar added: “My point of view, based on my own study of hydraulic fracking, is that it can be done safely and has been done safely hundreds of thousands of times.”

Another Certification

In 2009, the U.S. Dept. of Energy and the Ground Water Protection Council issued a report on the use of hydraulic fracturing in deep shale formations to produce natural gas. It concluded that hydraulic fracturing is a “highly controlled process” and groundwater is protected “by a combination of the casing and cement that is installed when the well is drilled and the thousands of feet of rock between the fracture zone and any fresh or treatable aquifers.” These billions of tons of rock, which have kept oil and gas trapped in place for millions of years, “also act as barriers to vertical migration of fluids upward toward useable groundwater zones.”

State regulators have attested to the safety of hydraulic fracturing. This year, Pennsylvania Dept. of Environmental Protection Secretary Michael Krancer told Congress: “There has been a misconception that the hydraulic fracturing of wells can or has caused contamination of water wells. This is false.”

Former Pennsylvania DEP Secretary John Hanger, who served under the administration of Gov. Ed Rendell, concurs. “We’ve never had one case of (hydraulic fracturing) fluid going down the gas well and coming back up and contaminating someone’s water well.” Mark Zoback, a Stanford University geophysicist and adviser to U.S. Energy Secretary Steven Chu, explained why last year: “There have been fears that hydraulic fracturing fluid injected at depth could reach up into drinking water aquifers. But the injection is typically done at depths of around 6,000 to 7,000 feet. Drinking water is usually pumped from shallow aquifers, no more than one or two hundred feet below the surface. Fracturing fluids have not contaminated any water supply and with that much distance to an aquifer, it is very unlikely they could.”

On earthquakes, the National Research Council issued a major report earlier this year that debunked the misinformation peddled by some environmental activists about hydraulic fracturing and seismicity in general. The report found “[t]he process of hydraulic fracturing a well as presently implemented … does not pose a high risk for inducing felt seismic events.” The report noted that geothermal power plants in Northern California, which environmental activists don’t oppose, are linked to hundreds of “felt induced events” every year. The NRC also included an important reminder: “Most earthquakes, whether natural or induced, that are recorded by seismometers are too small to be noticed by people.”

Here Is the Reason Why

Once again, Stanford’s Mark Zoback explains the reasoning behind the NRC’s conclusions. In testimony to Congress this year, Zoback said “extremely small microseismic events occur during hydraulic fracturing operations.”

According to Zoback, these microseismic events “affect a very small volume of rock and release, on average, about the same amount of energy as a gallon of milk falling off a kitchen counter.”

These are just a few examples of the mainstream (and bipartisan) opinions held by scientists, regulators and policymakers across the country. While the Inglewood Oil Field study is site specific, it does provide further evidence of the widely held view among experts that hydraulic fracturing is a safe technology with a track record going back more than six decades. Debates about appropriate regulatory conditions for conducting hydraulic fracturing are appropriate and should be held. When activists argue this technology is inherently unsafe, and should be outlawed, however they are staking out an extreme position and occupying the fringes of the debate over energy and environmental policy in this country.

In reality, the responsible use of hydraulic fracturing has helped create more than a million jobs so far, boosted our economy and bolstered our energy security. Furthermore, without this technology, President Obama could not have said at last month’s Democratic Convention in Charlotte that “the United States of America is less dependent on foreign oil than at any time in the last two decades,” or challenged the country to “develop a hundred-year supply of natural gas that’s right beneath our feet.”

Mr. Quast, California Director of Energy In Depth, may be contacted at dave@energyindepth.org

Launched by the Independent Petroleum Association of America (IPAA) in 2009, Energy In Depth is a research, education and public outreach campaign focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base – especially abundant sources of oil and natural gas from shale and other “tight” reservoirs across the country.

When an incident like the recent refinery fire in Richmond occurs, it’s only natural for questions to be raised about safety.  And it’s essential that thorough investigations be conducted to determine the answers as to why something like this happens, and how it can be avoided in the future.

One thing’s certain.  The answer is not, as some have suggested, to simply shut down this facility or any others that happen to be located near urban population centers.

To put an admittedly emotional issue into perspective, it’s important to note that the petroleum industry has an excellent safety record.  As a matter of fact, according to the US Bureau of Labor Statistics the petroleum and coal manufacturing industry in 2010 was tied with computer and electronic product manufacturing for the lowest nationwide rate of nonfatal occupational injuries and illnesses among all reported manufacturing sectors.

California’s refiners are also subject to the strictest air quality regulations in the nation, which provides superior protection not only for the health of their workers but for the communities in which they are located.

Then there are the economic considerations.  According to a June, 2011 study by Purvin & Gertz, the petroleum industry provides over 330,000 direct and indirect jobs in California, representing over $17 billion in annual wages paid.   The study also found that the state received approximately $5.7 billion in tax and fee revenues from the industry in 2009, representing about 5.5% of the state’s total revenue in that year.

Further, California’s refineries are critical to the availability of affordable transportation fuels that keep our economy going and consumers moving to work, school, medical care and other essential destinations.  And the fuel they produce is the cleanest-burning on the planet, thanks to California’s automotive emissions standards.  This presents a magnified supply challenge since very few regions outside the state produce California-compliant gasoline.  Cutting production here would not only increase our reliance on imported gasoline, it would create a real threat of severe shortages due to lack of product availability from out-of-state sources.

The fact of the matter is that there are risks associated with any kind of energy production, but they are far outweighed by the benefits.  That is why the focus should be on addressing the effects of these infrequent incidents; ensuring any impacted community residents get the care and assistance they may need; and completing repairs as quickly as possible to minimize supply disruptions and get local workers and vendors back on the job.

Most important of all is to determine precisely what happened and why, and to take any steps necessary to protect against similar occurrences in the future.

California’s petroleum industry has always placed safety first, and we now renew our promise to our workers and to our communities that we will vigorously pursue that commitment going forward.

California’s non-partisan Legislative Analyst’s Office has concluded the California Air Resources Board’s planned auction of emission allowances is costly and not necessary for the state to achieve the greenhouse gas emission reduction goals established by AB 32, the Global Warming Solutions Act.

In response to a request by Democratic Assemblyman Henry Perea of Fresno and Sen. Michael Rubio of Hanford, the LAO’s Mac Taylor wrote that eliminating entirely an auction of emission allowances planned for November will reduce the program’s cost burden on California businesses and employers but won’t reduce its effectiveness.

“Freely allocating 100 percent of available allowances can reduce the cost of compliance, as well as the overall economic impacts of achieving the goal of AB 32,” Taylor wrote.

Taylor said the program’s cap on emissions that declines over time is the feature of the cap and trade program that will result in reduced emissions and that will achieve the AB 32 targets.

“It is the declining cap on emissions that will reduce the state’s overall level of GHGs, not the manner in which allowances are introduced into the market. Thus, an allowance auction is not necessary to meet the AB 32 goal of reducing GHG emissions statewide to 1990 levels by 2020,” he said.

The November auction will require major industries like food processors, cement and glass manufacturers and refineries to purchase emission allowances as a condition of continuing to do business in California.  Business groups have noted the initial auction will do nothing to reduce greenhouse gas emissions but require up to $3 billion in payments to the state of California merely for the right to continue doing business in the state.

WSPA supports the goals established by AB 32 and believes a well-designed cap and trade program is an effective and appropriate means of achieving those goals. But Sen. Rubio is right when he says, “”We need to make sure we are exploring all alternatives to reducing greenhouse gas emissions in our state while minimizing potential economic impacts on California businesses and the jobs they create.”

“The greatest obstacle to discovery is not ignorance; it is the illusion of knowledge.”

– Daniel Boorstin

By Gina Grey

A question those of us who work in the petroleum industry hear often is, “Why doesn’t the oil industry get with it and invest in alternative fuels so we can wean ourselves off of our addiction to oil?”

This common refrain is expressed in a variety of ways and sounds simple enough.  The answer, however, is not simple.

First, the fact is that our industry has invested in oil-related infrastructure in this country over the past 150 plus years – most say the first oil well drilled in the U.S. was in 1859.  Billions of dollars have been spent, and continue to be spent, annually to improve the supply system for transportation fuels and hundreds of other everyday products derived from crude oil, such as anesthetics and aspirin, cameras, pens and ink, deodorants, glue and toothpaste and many, many more.

We do this seamlessly so the public is provided adequate, reliable, and affordable fuels in a similar way electric utilities provide electricity.

Second, our industry HAS been investing in advanced and alternative fuels to diversify the portfolio.  That investment, according to API, was an estimated $121.3 billion from 2000 through 2007 on emerging energy technologies in the North American market. This investment represented 65 percent of the estimated total of $188 billion spent by U.S. companies and the federal government.

Many of the initial alternative energy investments focused on alternatives like wind, solar, geothermal and landfill gas that can be used to generate electricity.  This has been followed by significant investment in the transportation fuels arena including biofuels from many different sources, hydrogen, and other emerging technologies.

You can get a sense of the scope of the petroleum industry’s investments in these fuels and technologies in an updated report WSPA has posted on its website.  Click HERE to review or download a copy.

Third, evolving the transportation system to a future with a diverse portfolio of fuels and technologies requires a much more lengthy timeline than many would like.  Some of the reasons for this extended timeline are simply the natural way new technologies are developed, commercialized and integrated into a vast transportation system.  Others involve federal and state government requirements.   For example:

• New fuels and technologies must ensure that extremely large volumes of the new fuels are commercially available.  We consume about 220 billion gallons of liquid hydrocarbons in the transportation sector annually – 140 billion being gasoline – which is approximately 378 million gallons PER DAY for personal transportation.  The size and scope of current fuel use is rarely focused on by those advocating a quick transition to alternatives.

• Similarly we must make sure there are large volumes of new technology vehicles prepared to use the new fuels and that the length of time for normal fleet turnover is taken into account.

• It’s also necessary to ensure new fuels and technologies are not more energy intensive to produce than conventional fuels and are as energy dense as conventional fuels so they propel a vehicle equivalent miles.  An E85 fuel, for example, is approximately 25 to 30 percent less fuel efficient than gasoline.  That means, while ethanol may be cheaper than gas at the pump it is actually more expensive on a per mile basis.

• We also need to provide the infrastructure necessary to produce, store, market and distribute new fuels to the marketplace.  The scale of these infrastructure requirements is enormous and all of it must undergo lengthy government oversight and permitting.

• New fuels must be compatible with vehicles now on the road and on the road in the future and won’t create performance or vehicle warranty problems.

• And perhaps most importantly for consumers, the cost of new fuels must be competitive with conventional fuels.

Some of these issues, particularly the government-related issues, can be reviewed in more depth in an API paper you can read by clicking HERE. We all agree the transportation fuels system is likely to evolve over time.  But we need to be realistic about the pace and timing of that evolution, along with being thoughtful and prudent about the costs and the hurdles that will need to be overcome.  As the eminent American writer and historian, Daniel Boorstin said, “The greatest obstacle to discovery is not ignorance; it is the illusion of knowledge.”

The most telling question in the Public Policy Institute’s recent poll of attitudes about cap and trade and AB 32 policies was the one that wasn’t asked.  Nowhere in the poll did PPIC ask Californians how much they were willing to pay for gasoline, diesel and other energy supplies to support the state’s climate change program.

Whether by design or oversight, the PPIC poll, titled “Californians and the Environment,” continues to perpetrate the myth that California’s experiment in solving global warming won’t cost consumers anything.  It’s little wonder 71 percent of Californians say they support AB 32 when they are told it will have no impact on their jobs, the state’s economy and what they pay for gasoline.

State regulators continue to keep Californians in the dark about the potential costs, disruptions to gasoline and diesel supplies and lost jobs because of the way CARB is implementing AB 32 policies.

We know those policies will be expensive.  The Boston Consulting Group recently concluded AB 32 fuels policies will likely increase the cost of making gasoline between 50 cents per gallon and $1.83 per gallon, most of which may have to be passed on to consumers if companies expect to remain in business.

Even CARB’s leadership knows the policies are likely to make fuel more expensive.  UC Davis Professor Dan Sperling told a recent gathering he was working on new regulations that would cap increases in the price of gasoline at 30 cents per gallon.

And Sperling and CARB Chair Mary Nichols wrote an article earlier this year where they stated that increased costs of 70 cents per gallon “is not enough to motivate oil companies to switch to alternative fuels or to induce consumers to significantly reduce their oil consumption, but it is still important to establish the principle of placing a price on carbon.”

I wonder what kind of response the PPIC poll would have received had it asked Californians if they were willing to pay 30 cents more or 70 cents more for a gallon of gasoline so California could show leadership, with little real environmental benefit if CA goes it alone, in the fight to combat global warming.

As we have said many times before, WSPA members support the goals established by AB 32 in 2006 and are committed partners in the effort to reduce California’s greenhouse gas emissions.  But we also support an honest approach to achieving those goals when it comes to the cost to the state and its consumers.  A suite of policies that are built on unrealistic scenarios will fail spectacularly when the bill comes due and Californians realize they’ve been misled.

CARB and other supporters of this particular set of regulations need to tell Californians the truth about the policies they are promoting and come clean about the real cost to consumers, businesses and the state’s economy.  Then Californians can decide if this set of policies are the ones they want to support to achieve the goals.

There are many effective, less costly ways to reduce greenhouse gas emissions than the policies being pushed on California by CARB.  It’s time to go back to the drawing board and begin developing policies that we can afford, will actually reduce greenhouse gas emissions and that have some chance of sustained support from California voters.