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Comments about "Web-only content: Prop 87, most expensive campaign in state history, fails under heavy opposition from Big Oil"
<< Back to Web-only content: Prop 87, most expensive campaign in state history, fails under heavy opposition from Big Oil
39 Comments on this article:
Let's get real. If I were the Oil Companies. I wouldn't pump any oil from California if this had pasted. I would have imported it all and raised the prices to offset the difference. That way I wouldn't have had to pay that silly Tax to pump in California.
I'm glad that most of the voters said this was a very bad way to go.
"Let's get real"? Sure. The reality is noone read this well-written proposition without allowing the oil companies to influence their good judgement. I've been pressuring Dems of California to bite the bullet and agree to measures that will separate us from our dependence on foreign oil. This would have been a bold measure, but a "real" one, nevertheless. It's common for politicians to be influenced by corporate money...but it's a real shame when the public starts to fall into the same ugly trap.
Every other state in which oil is pulled from the ground has this tax. California was going to use it to promote getting away from oil. The money on the pro side came from wealthy philanthropists while the money on the against side came from Chevron. (The No on 87 side outspent the proponents by $15 million last I heard.) Californians were worried the oil companies would take it out on us, (pass the tax on to us at the pump,) which is a legitimate concern but given the recently well publicized record profits of the oil industry, shame on them if they passed it on and all the more reason to work hard on getting away from them.
Hmmm. Upsetting really, to be influenced by corporations (their primary motive: Money; governments primary motive: at least claims to be FOR THE PEOPLE). A low percentage tax (1.5 - 4.0 %, personally I think 1.5% would’ve been high enough over the 10 year span) to raise 4 billion dollars over the next 10 years from oil companies could've helped California transition over to non-foreign, independent, and environment-friendly fuels at a faster rate. Oil companies would've kept doing their daily business in California (Record percentages of profits - 1.5% = still a lot of profit). If they did stop their oil business in California (because it’s cheaper to purchase these outer region oils and still make their whopping 1.5%) then I'd say these oil companies aren't American. Finally, the issue about raising gas prices on the consumer; well supposedly there was a state law in place to make that illegal. I was very letdown by the methods. Government policies are being feared, and there's always talk about big government & small government. Well people should’ve seen this as Dougherty stated, “a well-written proposition,” but somehow they missed out. I’ll make it easy; in a policy that has a Corporation in one corner and Government in the other. The policy that’s FOR THE PEOPLE is a better choice, always.
Brazil has become energy independent, that's true, and against much worse odds than California faces. Even if gas prices went up a little to compensate it is still just as important that we get away from foreign oil (war oil) as it is to fix the roads. What a let down California, we blew on this one. Big oil money prevails yet again and we continue to circle the drain.
Okay, so let's just keep driving and pollute. Why pay for a way to cleaner air? What do we care about melting ice caps and smog in our cities, when it creates such lovely sunsets. America needs to drive. All the time, to all the places.
Little remark on the side to all the no-voters - your gas prices will go up anyway, as high as the oil companies want it to go. And now we all can be sure to pay double - the prize at the gas station and the prize of continuing environmental damage.
I agree with "Jerry." You all sound like educated people - surely you've studied economics. The oil companies (or anybody trying to run a business) aren't going to be "good Americans" and drill in California because they want to be nice. They do it because it's cost-effective for the return. If the cost becomes too high, they're going to go somewhere else, i.e. internationally. Hmm...do we really want more reliance upon international resources?? Why don't we, the people, try to be good Americans and encourage local drilling by not punishing oil companies for staying here. Let the market run its course - supply and demand will always win - the oil companies' profits will go into alternative fuel when the supply levels warrant it. If you trump that with taxes, that's less profit they will have to pump (so to speak) into research & development.
... this proposition's logic was no different than taxing Google or EBay or Yahoo because they contribute to the consumption of fossil fuels and are tremendously profitable so lets tax them to the tune of a few billion and spend the resulting money on providing a future for venture backed blue-sky bets. N on Prop87 had less to do with endorsing current bad habits on 'combustion' based engines and everything to do with indirect funding for a few chosen venture bets.
Proposition 87 would have benefited California in the long-term. It's unfortunate that many voters were too short-sighted. A raise in gas tax on oil companies wouldn't neccessarily mean they will pass the cost onto consumers. If they did, it would force consumer gas demand to decrease. But since demand is so inelastic, it's hard to say if the demand decrease is significant. But I learned that in my economics course is that, if oil companies have a monopolistic profits by intentionally reducing oil production thus increasing price at the pumps, a tax on them would throw off thier monopoly off by forcing them to produce more oil thus lowering gas prices at the pump to conpensate for a decrease in demand. But besides that, a tax on oil companies doesn't doesn't really hurt consumers. So what if you have to take the bus to work, carpool a little more, or do more walking? That's better for the environment and for your wallet.
If we all paid the 'true cost' of gasoline, the cost of gas + environmental mitigation costs, it would be too expensive to be practical. We're kidding ourselves if we think there is no cost associated with polluting our air and water. A vote against 87 is a vote for lung cancer and another oil spill on your favorite beach.
Prop 87 was a good idea but that's what it was. The ballot initiative was financed not by the EPA or another environmental group it was financed by a man who wanted grants for his ethanol plants. I work in the investment business and cover oil companies and from looking at ethanol companies for the past 2 years, domestic ethanol is not the answer. 1) It destroys the land more than oil drilling does by depleting the resources of the land and 2) It eats up almost as much natural gas in converting the fuel than it actually creates in the market. i.e. it does not reduce greenhouse gases. If you would like more oil coming from Venezuela and Mexico, go ahead and pass it the next time elections come around. You'll just be taxing yourself more and giving the money to rich entrepreneurs looking for a tax break. Don't fool yourself cali, they were just trying to make you - the consumers - pay more not the oil companies.
And if you want to reduce greenhouse gases. DON'T DRIVE. Carpool for crist sake. How many of the people of california car pool. When I was there I saw very very few. Look in the mirror not at oil companies. Without the addict there is no dealer.
Was Prop. 87 a ethanol game?
Corn ethanol game?
The $0.51 per gal. corporate welfare to the oil refiners for adding 5.6% ethanol to California gas is about $500,000,000.00 per year.
The ethanol may add over $1.00 per gal. to the gas profit in California.
That may be about $100 billion in oil profit from California motorists.
The science is interesting but so is the money.
A $4 billion Prop. 87 oil tax may add $40 billion in oil profit.
Charlie Peters
(510) 537-1796
Clean Air Performance Professionals
People failed to see the extraordinary benefits of prop87 and failed by up supporting some profit hungry, powerful comporations, who clearly just want to keep us dependent on their oil.
Shame on you, for supporting the oil companies and ignoring the long term public needs of Californians!
Mr. Peters, the tax was on E&P companies not refiners. And without subsidies domestic ethanol would barely be profitable. When gas prices were in the mid 3's, ethanol was partly to blame as the price hit the mid 3's. Electric cars may be the answer but ideas such as E-85 and prop 87 are not.
It just seems wrong to tax one industry (oil) in order to fund its competition (more expensive energy sources). In addition, why should gov and tax payers play the role of venture capitalists. If you think alternative energy is a good idea, you can invest in the many companies pursuing it. Do not force me to do it.
We are more than lucky that this thing failed. It would have devasted our economy. It is just like the embryonic stem cell research... it's just a pipe dream - nothing more.
This is not rocket science. If we care at all about our environment, we should haved followed the lead of those who do and lead the way with Prop.87. Even if there were a cost involved beyond what is inevitable at the pumps anyway, would it be so great as to make mortgaging our children's future not worthwhile? Consider the possible motives of opposing backers - Chevron and the Lung Association - and tell me that Californians weren't duped.
It was a great idea but it really was too complicated to be put on the ballot. The legislature needs to have the guts to debate it fairly and then decide whether or not to pass it. Sadly, the whole campaign was a collosal waste of $s invested by both sides that could have been put to more productive and environment friendly uses.
California accounts for about 12% of US oil production. Almost all oil produced in California is delivered to California refineries. In 2005, oil pumped in California supplied 37 percent of California's oil needs, Alaska supplied 21 percent, and foreign oil 42 percent.
In California, oil producers pay state corporate income tax on profits earned in California plus a regulatory fee. The two together will total about $14M in 2006-07. Oil companies also pay local property tax. (Exxon's profits world-wide in 2nd quarter 2006 were $10.4B. Total profits in 2005 were $36B.)
In all other US states, including the #1 and 2 producers Alaska and Texas, oil producers pay a Severance Tax - basically a fee for state resources (oil, gas, minerals, etc.) that are being taken for the private company's profit. In 2004, all Alaskan severance taxes (oil, mining, fishing) totaled $647M and Texas severance taxes (oil, gas, sulpher, cement) totaled $1.9B.
Prop. 87 proposed a graduated Severance Tax, ranging from 1.5% to 6% depending on oil price per barrel (which is set by international markets - local factors have little to no effect). The tax would have raised $225 million to $485 million annually (depending on how part of the 1.5%-6% language is interpreted). The Severance Tax would have remained in place until it had raised $4B over about 10 years. Most of that money would have gone into trying to reduce California's oil consumption, which is a large component of what needs to be done to fight global warming.
Oil companies were talking about Prop. 87 raising gasoline prices. That would have been possible if the oil companies chose to import more foreign oil instead of using oil pumped in California, but otherwise they would not have been allowed to pass the severance tax on to consumers. In any event, crude oil prices are very much set globally, so this would have been unlikely to have much effect plus or minus.
There were claims that the Prop. 87 severance tax was excessive because of California's corporate income tax rates. Assuming that oil companies will always be in the highest tax bracket... California's corporate income tax rate is 8.84% and the proposition proposed a 1.5% to 6% severance tax - combined 10.34 to 14.84% (currently would be 13.34%). Alaska's top corporate income tax rate is 9.4% plus severance tax of 12.25-15% - combined 21.69 to 24.4%. Texas has a franchise tax of 4.5% plus severance tax of 4.6% - combined 9.1%.
If this info is correct and Prop. 87 had passed, the combined tax rate on oil companies in California would have been about half of #1 oil producer Alaska and 20 to 60% higher than #2 oil producer Texas.
State of Alaska, Petroleum Taxes - http://www.tax.state.ak.us/programs/oil/production/petroleumtax.asp
State of Texas, Tax Code (section 202.052) - http://tlo2.tlc.state.tx.us/statutes/docs/TX/content/htm/tx.002.00.000202.00.htm
State Corporate Tax Rates - http://www.taxadmin.org/fta/rate/corp_inc.html
(11 states have higher corporate income tax (top bracket) than California.)
The anti-87 campaign is generally considered to be the most ever spent on any California campaign – approaching $100M, essentially all from oil companies. Given the realities of Prop. 87 vs. the oil company claims, this essentially demonstrates that California voters (and at least several of the state’s major newspapers – for example, the LA Times) can be bought.
A recently published British government report estimates that addressing global warming will cost 1% of world-wide GDP if we do it now or 5-20% of world-wide GDP if we do it later. "His 700-page report forecasts floods, famine, mass movement of people and the destruction of species if the Earth’s temperature continues to rise."
But developing new technologies to use less energy and create less pollution gives the US a very good chance to stay leader of world business. This is going to be a gigantic market and the US has always been one of the best at developing and commercializing new technologies and creating new industries. But if we don’t start, we won’t get there. And if we don’t become aggressive immediately (probably yesterday), the cost in money and in quality of people’s lives will be very high.
I have faith that the private sector will move us off oil. Two companies to look at are Tesla Motors and Stirling Energy Systems. We don't need these hack politicians doing our creative work for us, do we? Another technology is Thin-Film. It's much more exciting to have achived something yourself than to have gov't control your venture capital. If the Proposition had said; If we would just build 100 sq. miles of solar energy farms, our whole country would have plenty of pure clean energy. Would you have voted for an Proposition of that nature?
Power to the People! The voters of California are not dummies and were not taken in by a bunch of Hollywood types and a smarmy ex-President.
I was surprised this did not pass. I mean, how often do you get so many celebrities and people as popular as Clinton supporting some feel good mesure like this alternative energy thing in of all states CA and not have it pass (it was not even close)?
Ethanol Eco nomics…
Tom McClintock’s Citizens for the California Republic, 06-18-2007
The public policy farce that the “Green Governor” unleashed with AB 32 (the so-called “greenhouse gas” law) continues. Using their newly granted power to slash carbon dioxide emissions, the California Air Resources Board (all Schwarzenegger appointees) has mandated that every gallon of gasoline sold in California must contain at least 10 percent ethanol by 2010.
First, a few basic facts. Californians use about 15 billion gallons of gasoline a year, meaning that the new ten percent CARB edict will require about 1.5 billion gallons of ethanol. Corn is the most common ethanol-producing crop in the country, yielding about 350 gallons of ethanol fuel per acre. That means converting about 4.3 million acres of farmland to ethanol production, just to meet the California requirement. But according to the USDA, California currently has only 11 million acres devoted to growing crops of all kinds. Get the picture?
The entire purpose of this exercise is to reduce the carbon dioxide emissions from California automobiles (although Californians already have the 8th lowest per capita gasoline consumption in the country). And that’s where the public policy discussion becomes farce.
As more acres are brought into agricultural production, the demand for nitrogen fertilizer will grow accordingly, which is itself produced through the use of fossil fuels. And the most likely source of new agricultural land will be converting rain forests to agriculture, although deforestation is already the second biggest man-made contributor of carbon dioxide emissions, ranking just behind internal combustion. And here’s the clincher: ethanol is produced through fermentation, by which glucose is broken down into equal parts of ethanol and – you guessed it – carbon dioxide.
Obviously, this edict will hit gasoline consumers hard: ethanol is less efficient than gasoline and it’s more expensive – meaning you’ll have to buy more gallons at the pump and pay more per gallon.
The bigger impact, though, will be at the grocery store. By radically and artificially increasing the demand for ethanol, the cost pressure on all agricultural products (including meat and dairy products that rely on grain feed) will be devastating. Earlier this year, spiraling corn prices forced up by artificially increased demand for ethanol produced riots throughout Mexico.
The CARB regulations will undoubtedly hit Californians hard – but they will hit starving third world populations even harder. Basic foodstuffs are a small portion of the family incomes in affluent nations, but they consume more than half of family earnings in third world countries.
So when the global warming alarmists predict worldwide starvation, they’re right. They’re creating it.
http://www.carepublic.com/blog.html?domain=tom_mcclintock&blog_id=136&category_id=&start=0&arcyear=&arcmonth=&curyear=&curmonth=&curday=
Saturday, July 14, 2007
NO on AB118
* Currently $0.51 per gallon goes to oil refiners for adding 5.6% ethanol to California gasoline. That is about $500,000,000.00 per year corporate welfare.
* AB118 may add over $1.00 per gallon to additional gasoline profits in California
* This is about the money from your pocket
* The corn ethanol waiver in the 2005 federal energy bill will lower gasoline prices, improve miles per gallon, lower oil use and improve the air.
* NO on AB118. Contact your elected officials and share your opinion
(make copies and give to your friends)
Clean Air Performance Professionals
http://www.friendsofthefringe.com/archives/30
http://unri.org/boards/viewtopic.php?p=10818
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