THE BLOG
10/11/2015 01:54 pm ET Updated Oct 16, 2015

Jerry Brown, Greening California and the Ancien Regime of Oil

When Governor Jerry Brown signed new landmark legislation advancing California's leadership role on renewable energy and energy efficiency on October 7th, he did so amidst signs that his recently thwarted drive to cut petroleum use in California by half is proceeding on other fronts.

Last month, as I discussed here, the oil industry, utilizing a multimillion dollar campaign of deceptive advertising and high-priced lobbying, succeeded in getting a bloc of self-styled "moderate" Assembly Democrats -- whose leaders have taken big money from the oil industry -- to hold off the portion of Brown's new energy plan requiring that petroleum use in California be cut in half by 2030. The plan had easily passed the state Senate, with Senate President Pro Tem Kevin de Leon as its legislative author.

What remained, ramping up the state's renewable energy requirement to 50 percent of the electric power supply by 2030, as well as a doubling of energy efficiency in buildings, was plenty big enough.

Governor Jerry Brown, at the famed Griffith Observatory overlooking a Los Angeles still hazy from smog despite air improvements, signed legislation he outlined in his fourth Inaugural Address to boost California's renewable energy requirement to 50 percent of its electric power and double energy efficiency in its buildings by 2030.

The world's seventh largest economy getting half its electric power from the likes of solar, wind, geothermal, and biomass is a very big deal, as is the further ramping up of California's decades-long leadership in using all forms of energy far more efficiently. (California is already over 25 percent renewable power as a result of policies established by Governors Arnold Schwarzenegger and Gray Davis, and Brown himself in both his governorship of the '70s and '80s and his renewed governorship.)

And the new renewable requirements for the state's utilities contain a wicked kicker for the oil companies. The utilities are now required to help California establish a widespread infrastructure of charging opportunities for electric vehicles, thus undercutting the oil industry's built-in advantage of filling stations everywhere. This deals with a major complaint about electric cars, i.e., their limited range of lack of charging facilities.

Brown also signaled that he will use executive power, principally through the state Air Resources Board, to further his goal of sharply cutting petroleum use. Indeed, it's not entirely clear that legislation was needed in the first place. But I suspect that the legislative defeat last month at the hands of the oil industry will prove best for Brown and California in the long run, as it dramatized how huge the stakes are in a way that yet another in a succession of programmatic advances by the state on climate policy would not have done.

First, Brown appeared at the Air Resources Board at the beginning of the month to urge on its work to reduce oil usage.

Then, at the end of this past week, Brown signed bills to deflate what credibility there is for Democrats who take the money and do the bidding of the oil industry and mask it as concern for low-income Californians.

Brown signed bills to direct $1 billion in revenue from the state's carbon cap & trade market to help low-income Californians participate directly in renewable energy. And he signed a bill by outgoing Assembly Speaker Toni Adkins giving the legislature two seats on the Air Resources Board to address claims that the ARB process is too opaque and unresponsive to the legislature.

That won't stop the oil industry from opposing Brown's moves to make one of the world's largest economies a model for how to do with vastly less of its planet-cooking product. But it will make it harder for the oil industry's would-be minions to follow its lead without being unmasked.

Brown and California as a whole have an interesting history with the oil industry. During his term as California's attorney general during the four years before he returned to the governorship in 2011, Brown accompanied his backing for then Governor Schwarzenegger's landmark climate change efforts with moves all his own. They included using land use law to attempt to deal with the greenhouse gas-intensive effects of sprawl development and a plan to get global oil giant Chevron, long based in the San Francisco Bay Area, to clean up its pollution and reduce and mitigate its own greenhouse gas emissions. He got to know Chevron leadership, earlier iterations of which he'd dealt with during his governorship in the 1970s and '80s, pretty well.

As governor this time round, Brown had a relatively benign relationship with the oil industry, supporting its already well-established operations in the state and, if properly watched over, potential fracking operations as well.

As longtime readers know, I've been encouraging of Brown's policy to foster a potential fracking boom in California, something a USC economic forecast showed could be an absolute bonanza for the Golden State in terms of boosting the overall state economy and high-wage employment and yielding major revenue increases for state government.

As long as people are using oil -- and even with Brown's target of cutting use in half by 2030, we'll be using a lot of oil -- why not have California reap the economic rewards?

I first checked out fracking (hydraulic fracturing) in California in 1980, outside Bakersfield in the Central Valley's Kern County, where fracking has been practiced considerably longer than that. The horrors prophesied by the most vehement fracking opponents haven't emerged there.

The fact is that many, though not all, fracking foes misunderstood the nature of the potential threat, which is of concern, and distorted Brown's position. Screaming in horror about the absolute waste of water for fracking in the midst of California's drought, opponents did not understand that only enough water for 500 households was used last year, literally a drop in the metaphorical bucket. And Brown made clear that any fracking boom scenario would proceed under careful oversight, as famed climate change legislative author Senator Fran Pavley's legislation made even clearer.

For there to be a California fracking boom in the first place, two fundamental things would have to be true. First, the reserves accessible to current technology would have to be equivalent to the Obama administration's Department of Energy forecasts utilized for the USC economic report. Second, the price of oil would have to be maintained at a historically high level, because this is high-cost oil to develop.

As fate would have it, and as too many enviros evidently failed to grasp, neither condition exists.

First, it turned out that the Obama administration, which I think has a penchant for getting some big things wrong -- as in, say, its geopolitical strategy -- got it wrong with regard to California's reserves.

Then the oil price plunged. With oil superpower Saudi Arabia merrily sanctioning it all, the price of oil proceeded in several dramatic increments to plunge in just a matter of months by 60 percent from its June 2014 level. Which served most of the Saudis' strategic aims, as I discussed here.

Brown, naturally, knows all this, even if some of his critics don't.

Ironically, given the Saudi short-term role in quashing California's hopes for a fracking-based economic bonanza and the long-term Saudi role as the single most powerful element in the ancien regime of oil driving the greenhouse effect which California's long-range policies are designed to control, California itself is in part responsible for the eminent position which the Kingdom holds.

For it was Standard Oil of California, then better known as Socal and today known as Chevron, which determined Saudi Arabia's vast petro potential and launched the Saudi oil boom.

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Standard Oil of California, now known as Chevron, used this short 1948 film to lay out its story of saving the citizens of Saudi Arabia from a life of "monotony and poverty" by tapping into the vast Saudi oil reserves to build both post-World War II America and "a world that moves on wheels."

Socal was one of several ultimately giant oil companies created when President Theodore Roosevelt's anti-trust crusaders busted up John D. Rockefeller's original Standard Oil monopoly. Described by British journalist and oil historian Anthony Sampson as "a massively conservative company across in San Francisco," Socal was left out of arrangements among other oil giants that developed Iraq and Iran after World War I.

But the California giant, which had been relatively content with the Golden State's massive pools of crude, managed to find its way in the early 1930s first to Bahrain and then Saudi Arabia. After discovering that the seemingly inaccessible wasteland Saudi interior might be sitting atop the biggest and sweetest oil reserves in the world, the California company did a deal with one of King Ibn Saud's chief advisors, a former British spy and colonial officer named Harry St. John Philly -- later best known as the father of infamous Soviet spy Kim Philly -- and the geopolitical axis of the world began to move.

So vast was both the opportunity and the challenge that Socal ended up bringing in Texaco, Exxon, and Mobil to form Aramco, the Arabian-American Oil Company, which had its own California suburb-style city in Saudi Arabia. The Aramco partners were on top of the world. Until, that is, Saudi Arabia flipped the game in the 1970s. Cosmopolitan young Oil Minister Zaki Yamani helped organize the Arab oil boycott after the US intervened on behalf of a losing Israel in the Yom Kippur War of 1973. And the Kingdom formed a powerful pro-Saudi lobby in America helped by its chief lawyer in the US, former Bobby Kennedy campaign manager, JFK assistant secretary of state, and Pat Brown executive secretary Fred Dutton.

I got to know Dutton when he was on the University of California Board of Regents, to which he was appointed by Pat Brown but not reappointed by Jerry Brown. He thought the younger Brown was a great political talent but would not succeed in getting renewable energy, then called alternative energy, to overtake fossil fuel power.

Of course, that was before oil's role in climate change became known.

Now the younger Brown, no longer exactly young, is leading international action on climate change. He has co-founded the "Under 2 MOU" movement. The MOUs, or memoranda of understanding signed by subnational governments around the world, bring what Brown touts as the collective equivalent of the third largest economy in the world after the US and China to bear in pushing policies to cut greenhouse gas emissions.

We'll see how the rest of the world responds this December at the UN Climate Summit in Paris.

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