Valley Firms Push California Oil Tax

isabotage3 writes, "Still smarting from California's recent enactment of emissions caps, the oil industry is confronting another assault in the Golden State — this one bankrolled in part by Silicon Valley tycoons pushing to fund conservation and alternative-energy initiatives with a tax on oil output. Slightly more than half the money raised by the Prop 87 tax would be earmarked to help cut gasoline and diesel use. Another 27 percent would be put toward alternative-energy research at California universities. The remainder would be used to help start-ups, retrain energy workers in new fields, and for administration." Oil companies claim the backers of Prop 87, some of them venture capitalists, would profit from state money flowing into the alternative-energy projects they are funding.

Comments

Trendy

[celardore]

It's cool to be green. Being 'enviromentally friendly' is currently some of the best marketing you can have. Take for instance, Richard Bransons latest pledge.

I'm not opposed to this sort of corporate behaviour myself.

Re:Trendy

[Quadraginta]

Yes, I think the Black Death does offer food for thought. As I recall (it's been a while since medieval history class), the period just before the Black Death was one of economic stagnation, low wages, land scarcity and population pressure. The aftermath of the plague was a steep rise in the cost of labor, with consequent spread of prosperity at the bottom of the economic pyramid, a loosening of feudal constraints on trade and migration (since it was harder to hold a serf when he could make very good wages by skipping off to town), and an economic renaissance (called the 'High Middle Ages') that arguably helped bring about the Renaissance itself that shortly followed.

But the problem with this comparison is that death by plague is essentially a Malthusian crisis; it's a giant act of natural selection. It's bound to improve the species, by selectively taking those who are less healthy, less clever and capable, or who are making poor use of their resources. There's nothing wrong (as far as the species, not individuals, are concerned) with a Malthusian crisis.

What we've got in the present, however, is a different thing. As you said yourself, it looks like it's the most capable of us who are no longer breeding. It's almost an inversion of natural selection, something that would not make the species more healthy and successful, but which could lead to quite the opposite. Not good.

Of course, in the ineluctable calculus of Mother Nature, "capable" is as capable does. We may consider highly educated, morally-refined, sensitive individuals as the most capable members of our species, but if they fail to breed, then by Mother Nature's standards they are not -- they are simply an evolutionary dead-end which will be replaced by other branches of our species. The giant brontosaurs probably considered the biggest of them to be the most "capable" dinosaurs around, too. But they were wrong. It was the little guys with wings that made it.

That's why I myself (only partly in jest) favor stabilizing population by introducing a predator. Something large and agile, with fearsome claws and teeth, almost as bright as human beings, with good eyesight, smell and hearing. Let it roam the Earth, catching and eating people who fail to blend in discreetfully with their natural surroundings, who argue noisily with their neighbors or fail to dispose neatly of their garbage, or who, because of being on the cell phone, fail to pay enough attention while driving to spot the primitive deadfall traps (with crude but sharp stakes at the bottom) that the animals dig in the highways. Since the animals would be clever enough to stake out restaraunts or malls, we can imagine that the average level of human fitness would dramatically improve. No obesity pandemic when people must routinely sprint across open spaces, one eye cocked worriedly for that tell-tale rustling in the trees that presages fulfilling your destiny by becoming a tasty meal...

same old song and dance

[avi33]

It reminds of that manuscript recently dug up from the 14th century.

If there's one thing we don't need, it's the King and his "men of science" dictating their values to the marketplace. It's businesses like mine that are leading this nation to prosperity. If I have to refrain from tossing my pissbucket out the front steps, and deliver it all the way to the cesspool, it will cost me money, and I may have to lay off some peasants as a result. Besides, it hasn't been proven that these so-called bacteria even exist, and if they do, maybe they don't cause the black death. Maybe they will make our teeth straight and white forever. I say we should wait and see.

Sometimes government-mandated values work for the greater good.

Go slow, but steady.

[WindBourne]

It would be good if they implemented these taxes over a period of time. Say raising ten cents every 6 months. If you do that, you give the sellers and buyers time to adjust. The real issue is that we politics coming in and skewing things all the time. JC pushed America hard core towards Alternative. Reagan pushed us back towards oil. Poppa Bush/Clinton left it up to the free market. And W. has pushed us hard core towards oil. If a state is going to have a success, they need a long-term view on change and one that is voted in and can not be repealed. If the tax is applied over a period of time AND they know that it will increase (as opposed to hoping that it will decrease), then companies such as EEStore and Tesla will do what GM/Ford/Toyota/etc are unwilling to do.

Bring it on!

[Travoltus]

We're the world's 6th largest economy. If we tank, they tank. Demand plummets because California's out of the equation. Oil prices fall, and their stock falls.

Plus, we get to pursue alternative energy a lot faster. California will be bruised but we'll come out of it even better off than Brazil.

Then the rest of the world will follow our example, and the oil companies will get bent over like a cocktail waitress wandering into the NFL post game locker room.

Reduce fuel costs

[cubicledrone]

How about a tax credit for telecommuting? Ding! Traffic goes away.

But see, that would take control away from asscrack middle managers who insist on being able to penalize people for failing to leave for work two and a half hours early (and therefore miss breakfast and time with family) to overcome miles of 5 MPH traffic and unreasonable traffic signals. All we have to do to solve 21st century traffic problems is to get the fuck OUT of the 19th century workplace.

Another crap law

[Eccles]

Want to reduce emissions? "Tax" all CO2 producing fuel based on its carbon content. Let the tax be passed on to the consumers. Then, at the end of the year, distribute the money evenly, with checks to every man, woman, and child. Thus anyone who reduces emissions gets a bonus, while long-range Hummer drivers pay more. The incentive to produce alternative energy will come from its lower cost, the disincentive to produce more greenhouse gas will be represented in higher costs.

Simple, few bases for anyone to object (cabbies and long-distance truckers would have to raise their fares), promotes alternative energy.

Re:Government pork is for everyone

[thrillseeker]

That is exactly the short-sightedness I'm talking about. There's plenty of room at this sow's tit.

This sow's tit is the pocketbook of the taxpayer - and apparantly the departure of so many of those paying taxes from the state is read as an incentive to 'squeeze 'em more".

Re:No on Prop 87?

[evilviper]

First, it does not allow the tax to be transferred to consumers. Second, it does not levy a tax against gasoline consumers. The cost of gas must increase if you expect to see an impact in fuel consumption.

You can raise the price on bottles of oxygen all you want, but if there's no alternative at any price, I'm just going to be screwed by the high price, and HAVE TO pay it.

When Ethanol, Biodiesel, etc., are available in volume, THEN you can raise prices, and see some change. Right now, people will just have to pay it.

If you think everyone will just take public transportation instead, you're so wrong it's not funny...

Re:Taxes on oil companies end up being paid by peo

[RandomLetters]

Know why gas went to $3/gal in the US?? Because PEOPLE WERE WILLING TO PAY IT. They griped, they whined, they complained, but everyone still went down to the gas station once or twice a week and filled up.

Can you believe they were whining about the price? I mean it's like them whining about how much the air companies charge for air. $3/cubic foot. I mean if people are willing to pay it then that justifies the price. I myself have refused to buy air and am perfectly fine with not breathing.

My heart goes out for the minority that can't afford it, but businesses are in business to make money, not provide charity work.

I know! My heart goes out tho those minorities who are suffering too. It's not like everyone needs to drive to work. I mean doesn't everyone have easy access to public transportation?

The funniest thing I heard was someone whining about Exxon's record profits. I didn't hear anyone offering to give them money several years ago when their profits were in the crapper.

I did my civic duty back then. I bought as much gas as I could to help them out with their massive suffering and complete lack of money which led to such a tremendous hardship for them.

My daughter, bless her heart, wanted a new car. She went out and bought a Yaris and now gets 40MPG. Toyota can't keep them on the lot. I bought a motorcycle a year ago and get 50MPG, so there are already means to reduce consumption.

See alternatives. Just like I was saying. Instead of buying gas you can buy less gas... and die in a motercycle related mishap.

As for those 'cheaper alternatives', where are they. Ethonal?? I've read mixed reviews, some claiming it's the answer to everything, some claiming that the resulting agribusiness pollution might be worse than what comes out of our tailpipes now. Hybrid cars?? First, they cost more. Maybe their effective MPG makes up for some of it, but the anlysis I've seen says they are still more expensive in the long run once you start swapping out batteries. Biodiesel?? There is only so much french fry oil in the country.

Yeah there's no solution right now so we definitely shouldn't try to find one!

Renewable Bureaucracy

[JonBuck]

California has a history of creating programs with the best of intentions that do not actually produce any results. Take, for instance, the 2002 law that mandated that electrical utilities must get 20% of their energy from renewable sources by 2010. The result has been over $300 million taken fron consumers in order to subsidize it, and not a penny spent? Why?

Here's why:

"It is an extraordinarily complicated process compared to any other state in the country," said Ryan Wiser, a scientist at Lawrence Berkeley National Laboratory who has studied efforts by 21 states to mandate increases in the use of renewable power. Wiser wrote a paper on California's process titled "Does it Have to be this Hard? Implementing the Nation's Most Complex Renewables Portfolio Standard."

        Wiser said that here, unlike anywhere else, two state agencies -- the California Energy Commission and the Public Utilities Commission -- have regulatory oversight of renewable projects, forcing developers and utilities to work with two distinct bureaucracies.

        And each project faces multiple, and sometimes redundant, monthslong proceedings in front of regulators before getting approval, while most other states only require one.

The state of Texas is surpassing us in renewable energy development. Since they enacted their ten paragraph legislation in 1999, they've gotten 2,200 MW of wind power. How much have we gotten since 2002? 242MW. How long was our legislation? 13 pages.

What's more, renewables enjoy very broad bipartisan support in California. But since we do not have state government that is actually friendly to business, we get zip or very little actual action.

And all the while the politicians get to pat themselves on the back that they're Doing Something for the Greater Good!

It's crap like this why I've become more libertarian in my political outlook.

Re:Taxes on oil companies end up being paid by peo

[kindbud]

Tax a business, their costs increase, they pass that charge onto their customers.

The authors of this bill know that, and have included language in it that attempts to prohibit passing on the costs to the customers. Whether it will work or not, I have no idea, but your objection misses an important feature of the bill.

Re:No on Prop 87?

[tsotha]

But if the oil companies charge californians more than what they charge elsewhere in the US, well its pretty obvious whats going on.

Uh, yeah, it is obvious when you realize oil companies have to produce special formulations for California because of clean-air restrictions. I still think those restrictions are a good idea, but of course we're gonna end up paying more at the pump. That and the state won't allow any new refineries, so there's an artificial bottleneck. You realize all California's imported oil comes by way of tankers and is refined in California, right?

By the way, the profit in the retail gas business all comes from the mini-mart, while the gas is break-even or a loss. I've known two gas station owners. They both made a lot of money, and both of them lost money on gas. So the retail gas price in CA is really quite a bit lower than it should be, except people are willing to drive around to pay one cent/gallon less on gas and fifty cents more on everything else they buy. Go figure.

Re:No on Prop 87?

[Shag]

I'm a consumer in Hawaii, which had a cap on (wholesale) gas prices. The cap was determined each week based on some spot prices on the mainland. When the cap was in effect, our gas was consistently a certain amount above the average of those spot prices.

So the oil companies said, "you know, if your gas price cap weren't there, your prices wouldn't be linked to the mainland prices and you'd probably pay less.

And enough fools believed them that the cap was done away with.

Shortly thereafter, mainland prices dropped something like 40 cents a gallon.

Ours didn't budge.

The moral? Don't believe an oil company that claims to be showing you a way to give it less money.

I think our prices have now, after several weeks or months, dropped about 20 cents. Some places on the mainland, gas is under $2 a gallon again; here, the cheap stuff is $3.40.