THE BLOG
06/19/2010 01:51 pm ET Updated May 25, 2011

Big Oil's Hazardous Path to Repeal California's Clean Energy Law

The tragic Gulf oil spill is now 'spilling over" into California's politics. It now threatens to undermine an oil industry funded proposition on the November ballot to kill California's landmark clean energy and air pollution law.

When Texas oil refiners Valero and Tesoro were contemplating whether to buy their way onto the California ballot last winter, they envisioned a ripe environment for their proposition to repeal the state's clean energy and air standards: skyrocketing unemployment rates, a Tea Party-inspired anti-regulation backlash, and increased skepticism about the science of global warming fueled by the rants of right-wing talking heads Glenn Beck and Rush Limbaugh.
Sure, the state's landmark climate law (AB 32) was popular - with 66 percent approval in a PPIC poll and 58 percent in the Field Poll. Yes, Attorney General Jerry Brown had given the initiative a deadly accurate but inconvenient title and summary ("Suspends Air Pollution Control Laws Requiring Major Polluters to Report and Reduce Greenhouse Gas Emissions").

And, of course, the then-cheerleaders for the ballot initiative weren't the sharpest knives in the drawer: gadfly Ted Costa (who has since announced his opposition to the measure after being pushed aside) and first-term Republican Assemblyman Dan Logue.

But initiative strategist Mark Carpenter, a former tobacco lobbyist who fought California's indoor smoking laws, apparently convinced the oil companies that those obstacles could be overcome by the deep pockets of Big Oil. After all, the $50 million or so it would take to win the campaign was chump change for an oil company that had just upped its CEO's salary to $10.9 million, a 64 percent increase from the prior year.

But a funny thing happened on the way to the ballot.

In late April, some 1.7 million gallons of oil began gushing from a British Petroleum well in the Gulf of Mexico each day. Horrified Californians continue to be exposed daily to images of brown pelicans soaked in black oil, tar balls washing up on beaches, and devastated local economies.

That's not exactly good PR for a ballot measure being bankrolled with $2 million from oil companies, including California offshore driller Venoco Inc. Cases in point: the immediate sharp decline in support for offshore oil drilling in California, according to a Los Angeles Times/USC poll and the defeat of a local measure to allow Venoco to begin slant drilling into the Santa Barbara channel.

Being associated with oil companies is political death this year.

On top of that, voters are beginning to focus on the economic downside of America's addiction to oil. That is driving a renewed push in the nation's capital for federal action to support a clean energy economy.

So it was no surprise then that President Obama bee-lined to California, the nation's leader in renewable energy development, when he wanted to connect the dots between investment in clean energy and the oil spill. He put a bright national spotlight on AB 32's renewable energy requirements, the driving force behind more than 500,000 clean tech jobs and $9 billion in solar, wind, and other renewable energy projects being built in California.

If the oil spill wasn't bad enough for Valero's fortunes, last week's primary election results might be even more problematic. Two special interest propositions were dismissed by voters despite record-shattering spending by their corporate sponsors.

That will throw a wrench in Carpenter's calculus for winning, which includes spending up to $50 million branding the oil company measure as a "jobs initiative."

Voters and the media already are seeing through that fog, noting that it is a deceptive measure that has little to do with employment and everything to do with allowing the company to bypass pollution laws.

And no one is buying that the ballot measure is just a "temporary" suspension of the law either - particularly when the once-in-a-blue-moon economic conditions it specifies (banning implementation of the law unless the statewide unemployment rate exceeds 5.5 percent for four consecutive quarters) have occurred just three times in the past 30 years.

The Valero initiative faces additional bad P.R. particularly because its high-profile CEO makes Enron's Ken Lay and BP's Tony Haywood look like church mice.

Valero chief exec Bill Kleese - recently named to MSNBC's "Mad Money" Hall of Shame - dismisses climate change legislation as "alarmist." He's taken a lead role as chief attack dog in battling clean energy policy at the national scale as Chairman of the National Petrochemical and Refiners Association. He also is the brains behind the AstroTurf "Voices for Energy" effort supporting Alaska Sen. Lisa Murkowski's effort to strip EPA of its right to regulate greenhouse gases. (That measure recently failed in the U.S. Senate .).

Meanwhile, Republican and Democratic candidates alike are distancing themselves from the Big Oil initiative.

Meg Whitman, not wanting to give Jerry Brown further ammunition in the gubernatorial campaign, has refused to endorse it (as has Lt. Gov. Abel Maldonado). Whitman's distancing herself from the ballot measure comes despite her call for a one-year moratorium on AB 32. She's declined to embrace an oil company-backed proposal unpopular among her Silicon Valley supporters, as well as suburban decline-to-state voters she views as key to victory in November.

Candidate Brown has come out strongly against the measure. Running against Big Oil, corporate special interest measures, and fat cat CEOs are all key components in the Brown playbook, and opposing the Dirty Energy Initiative fits nicely into that narrative.

It looks as if Big Oil picked the wrong time and the wrong place for this fight.