Oil & Industry: Connecting the Dots in the War Over California’s Greenhouse Gas Law

The fight over California’s greenhouse gas emissions law is being described as Texas oil vs. California’s big employers by supporters of the law — and as California’s vulnerable manufacturing sector vs. job-killing regulators by opponents who want to block it.

Last week, the Sacramento Bee confirmed that oil money is fueling the signature gathering effort to place an initiative on the state's November ballot that would suspend the emissions law, known as AB 32. The initiative's backers, calling themselves the California Jobs Initiative, have raised $966,000, with 89 percent of the funding coming from oil companies and 70 percent of that from oil companies headquartered in Texas.

Specifically, financial disclosure statements show that Tesoro Oil Company, Tower Energy Group of Torrance and the World Oil Corporation of Houston have each kicked in $100,000 to help the initiative gain enough signatures to qualify for the ballot. Southern Counties Oil Company gave an additional $50,000, and JACO oil put in $10,000. The bulk of the money to suspend the law, however, has come in the form of $500,000 from Texas-based Valero Energy Corporation.

Bill Day, executive director of media relations for Valero, disputes the description of the company as a Texas outsider trying to influence California.

“We employ 1,600 people in California in our refineries and gas stations,” Day says. “We own 80 gas stations and contract with many more in the state to carry our brand. We have a vested interested in the California economy.”

I asked Day why the company, which has invested in Texas wind farms and ethanol plants in the Midwest, was investing in an effort to get AB 32 suspended rather than putting its money into renewable energy development in California.

“Valero has looked at all the data, and we’re convinced that this [AB 32] is going to eliminate far more jobs than it will create. We’re talking about jobs that exist right now at our refineries that provide people with good salaries, health care and other benefits that are in danger because of this measure,” Day said, then added, “we’re in the gasoline making business and we make a lot of gasoline in California.”

Playing Both Sides?

In the thick of the fight over AB 32 is the California Manufacturers and Technology Association (CMTA). The group claims it is unconvinced about the jobs data, but its 45-person board — which includes representatives from Valero and five other oil companies — voted to support the initiative to suspend AB 32. At the same time, CMTA is a founding member of what's known as the AB 32 Implementation Group (AB32IG); CMTA Vice President of Governmental Affairs Dorothy Rothrock is the group's co-chair.

“No one has proven to us that based on a California-only regulation that they’ll be able to keep all the existing jobs here now and create new green jobs,” CMTA media spokesperson Guido DiCaro said.

He repeated several times that the association was not convinced by any of the studies on AB 32 — neither those claiming job creation nor those claiming job losses if the law is implemented. CMTA has commissioned its own study in collaboration with California Lutheran University which it plan to publicly release in the next three weeks.

CMTA’s position puts the organization at odds with some of California’s largest employers including Google, Waste Management and CMTA member Chevron, which don’t support the initiative to suspend AB 32.

DiCaro said that there was not an issue with CMTA both being a member of an organization calling itself an AB 32 implementation group and supporting the initiative to suspend AB 32.

“What we really want is to implement AB 32,” DiCaro said. “We’re not trying to stop AB 32 at this point.”

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