Monday, September 18, 2006
The Clean Alternative Energy Act calls for a one-and-a-half to six percent tax on oil drilled in California. The tax would stay in place until it raises four billion dollars. That's expected to happen over the next ten years. Proceeds would be spent on programs and research designed to develop alternative fuels. The goal is to cut California's dependence on oil by 25 percent over the next decade.
The battle over proposition 87 is well funded. Proposition 87 Supporters are taking on California oil companies. They're making the most of public dissatisfaction with high gas prices.
Ad : "The oil companies are making us pay. They made $78 billion last year.
Make oil companies pay and make it illegal to pass the cost to us. Yes on 87 for cleaner energy."
Thad Kousser is a political analyst at UC San Diego. He says oil companies are wearing the black hats this political season.
Kousser: "It was Enron and big CEO's a few years ago. Today, it the folks who are making us pay three dollars at the pump. The backers of prop 87 are hoping that Californians hate oil companies even more than they hate taxes."
Kousser says Prop 87 opponents are banking on the state's long anti-tax history. Voters have repeated voted down new taxes of any kind.
Ad: "So now they want to increase oil taxes? Really? A $4 billion dollar state tax increase on oil. Ouch. Since when is that a good idea? Vote no on 87. It's a recipe for waste, not progress."
Kousser says the ads are pretty typical for a well funded initiative battle. Each side focuses on an issue designed to resonates with voters.
Kousser: "To be effective, ballot propositions have to be complex laws. But to be effective, 30 second TV spots have to be simple, so by definition. you're always going to have ads that are misleading, that only focus on the good things and don't talk about the costs and trade-offs. Or only pull out that one flaw in the initiative that opponents want to emphasize."
Energy companies are pumping more than 30 million dollars into the effort to defeat proposition 87. The biggest contributors are Chevron and Aera Energy. Both companies extract crude from California oil fields. No-on-87 spokesman Scott MacDonald says the message is simple.
MacDonald: "We do not need a tax that will increase the cost of gasoline and diesel fuel and aviation fuel at a time when they're at record levels. And our economy has already felt the drag from it. And even if we are recovering some. We don't need to be pushing our record gas prices back up. We do not need that."
On the other side, Venture Capitalists are putting tens of millions of dollars into the effort to pass proposition 87. Some of them stand to benefit from research money generated by the measure. The Utility Consumers' Action Network supports 87. Executive Director Michael Shames says California voters would benefit from that investment in the future.
Shames: "The alternative fuels that may come about as a result of the investments from this new fee, could generate the kind of competition we need at the pump so that the gasoline companies don't have us over a barrel."
Shames says the measure specifically prohibits oil companies from passing the cost on to consumers, but he concedes that may be difficult to do.
Alan Sweedler runs the Center for Energy and Environmental studies at San Diego State University. He says the carbon based oil economy won't last forever. Sweedler says its prudent to begin developing alternatives fuels, now.
Sweedler: "I would prefer to see the federal government to step up to the plate and say this is an issue that we have to deal with and then provide funding through the normal budgetary mechanisms, but the federal government is not doing as much as it should."
The federal government's reticence opens the door for California to become a leader in alternative fuel research. However, when voters consider proposition 87, they'll likely decide which they dislike more; oil company profits or a new state tax on the industry. Erik Anderson, KPBS News.