In California, A Bad Proposition

By November 3, 2006Energy

California seems intent on tumbling into the sea. However, this will not be caused by nature, it’ll be brought on by a huge, crushing self-inflicted economic earthquake.

Exhibit A (or is it Z?) is Proposition 87. We’ve written about it in this space before, but as we close in on Election Day, we thought it might be worth another pass. Prop 87 will levy a tax on oil production in California and use the money to pay for alternative energy research. One of its stated goals is to reduce gas consumption by 25%. They’ll no doubt do that in two fundamental ways: By driving up the price of gas for everyone, including those least able to afford it, and by driving people and businesses out of the state. Recall that California already ranks dead last in state migration, meaning more people leave California to move to other states than any other. Prop 87 will only speed the exodus.

Bill Clinton was in California this week to stump for Prop 87 along with a bunch of hypocritical Hollywood types and an equally hypocritical Al Gore. All have preached a good game about consumption while burning up the carbon. After all — rules in their world are for the little people.

On his pro-Prop 87 stump, Clinton is fond of citing Brazil as a role model. Says Bill, “If Brazil can do it” meaning energy independence, “So can California.” Sure sounds good, right? But look at the facts: Brazil made a move toward ethanol to be sure, but Brazil ultimately became energy independent by drilling their way there. As this editorial in Investors Business Daily points out, Brazil “Launched a crash program of offshore oil drilling in the late 1990’s, working with a Manhattan Project-like determination to develop its own natural resources.” (Developing its own natural resources? What a concept! Congress, are you listening?) The story has a chart that shows how Brazil’s oil production far outpaced its ethanol production, but that doesn’t make the same gooey 30-second spot that stretching the truth does in this case. Had Brazil decided to tax its own oil production, they’d still be buying oil on the international market like we are.

The bottom line is that Prop 87 will drive up the price of gas for all Californians. At the end of the day, it will create a disincentive to drill for oil there, making California and the rest of us even more dependent on foreign oil.

Maybe Bill Clinton, Al Gore and their Hollywood glitterati pals should just climb back into their Gulfstreams, burn up a little more carbon and go find a better — and less expensive — cause.

Join the discussion 3 Comments

  • steve says:

    Hey… isn’t Brazil cutting down trees to make ethanol, which in turn is damaging the environment and causing global warming because the lush forests are gone!!!

  • SwampWoman says:

    Is it oil profit or refinery profit?

  • Charlie Peters says:

    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