Category Archives: Energy

A Major Step to Protect Californians from Gasoline Price Manipulation

Tim O'Connor, EDFYou can’t turn on a TV or radio in California these days without hearing the oil companies and their industry associations complaining that the state can’t afford to move to cleaner fuels and predicting that cutting pollution from the transportation sector will drive up gasoline prices.

What the oil industry’s $56 million political campaign, and even wider reaching ad campaign,  doesn’t say is that if gas prices do go up this year, it is likely to be the oil industry—not clean energy—that’s to blame.

Since 2005, the price of gas in California has fluctuated by an average of $1.16 per gallon, while diesel has fluctuated by $1.01. Year after year, prices at the pump shoot up – yielding significant additional profits for fuel suppliers – then casually drift down back to a point higher than where they started. The phenomenon is so well known, industry insiders call it rockets and feathers.

The oil companies say they don’t cause these fluctuations, but the problem is so severe that Governor Jerry Brown and the state legislature just gave the California Energy Commission $342,000 to investigate and prevent gas price fixing and market manipulation by the industry.

Market domination can lead to price manipulation

Transportation fuel is a concentrated market where a handful of suppliers control a product everyone has to have. Small and large businesses, commuters, soccer moms, motorcycle clubs—pretty much everyone needs the gas and diesel supplied in California by just 22 companies, six of which (Chevron, Tesoro, BP, Phillips 66, Valero and Shell) control 90 percent of the total supply.

Since the early 2000’s, government officials have recognized that this concentrated, opaque market is a problem. As a 2004 report by then-Attorney General Bill Lockyer reported:

“Without changes in public policy that address market conditions, California will not rid itself of high gasoline prices. Policymakers must begin taking the steps necessary to increase competitiveness, supplies and fuel conservation…and to reduce California’s petroleum dependence through increased fuel economy and non-gasoline based technology.”

Eight years later, in 2012, U.S. senators from California, Washington and Oregon sent a letter  to U.S. Attorney General Eric Holder requesting an investigation into oil company market manipulation and price fixing. Citing analysis produced by McCullough Research, the lawmakers observed that refinery shut down reports were inconsistent with production data. According to McCullough, price increases generated an estimated $25 million per day in windfall profits for the oil companies.

A promise made in 2013

In September 2013, the California state legislature took a stand against market manipulation by passing a landmark bill, SB 448. The bill provides resources and direction to the state’s Energy Commission to perform market analysis to identify the causes of gas and diesel price spikes and fluctuations.

By passing the bill, the legislature made California the first state to provide dedicated resources to look into gasoline price swings and protect California drivers. Governor Brown, recognizing that his state needed the capacity to deal with sudden price fluctuations, directed “the Commission to work with the Attorney General to evaluate market trends and ways to respond to price volatility.”

The answer: Fuel diversification and clean fuels policies

There are many reasons to support cleaner fuels. California still has the worst air quality in the nation, and spends over $30 billion per year on gas and diesel from imported oil. No wonder more than 70% of Californians support its clean fuel policies. Yet the oil companies, led by Chevron, Tesoro and Valero are doing everything they can to kill these measures – common sense solutions that clean up the air and accelerate home-grown alternative fuels that break our dependence on gasoline and diesel.

In early 2014, EDF teamed up with nation-leading economists who focus on fuel market dynamics to describe some of the benefits of California fuel policies, such as long term price reduction. In the analysis, we found that:

“By diversifying the state’s fuel mix with a portfolio of alternative and conventional fuels, California’s overall fuel price volatility and price levels (for all fuels in the portfolio) are likely to be reduced in the long run… By extension, policy changes that undermine or take away incentives to diversify the fuel mix are bad for California consumers, the economy, and the environment.”

As California implements its new state budget, hires new experts and uses its law enforcement tools to look into the true causes of market fluctuations, the benefits of California clean fuels policies will become even clearer. The recommendations made by Attorney General Lockyer ten years ago will finally be fulfilled and the oil industry’s blame game may even be shut down once and for all. Best of all, the popular new policies that will lead California to cleaner, cheaper fuel will be strengthened and preserved.

Also posted in Cap and trade, Clean Energy, Climate, Global Warming Solutions Act: AB 32, Low Carbon Fuel Standard, Transportation | Leave a comment

Does Big Oil Really Care About Vulnerable Communities?

Jorge-MadridThere they go again… with the same lament we always seem to hear from Big Oil lobbyists when it's time to protect public health:

Don't put environmental protections on fuels, because that "will hit low-income and middle-income families the hardest." In other words, if you make us clean up our act, then we'll be forced to raise gas prices, which hurts vulnerable people… You don't want to hurt them, do you?

Hmmm. Do oil companies really care about vulnerable populations like low income people and communities of color? Could it be that they are using these families as a smokescreen for killing environmental protections and protecting their profits? Let's look at the facts and see if we can cut through some of this smoke.

Oil companies are among the most profitable enterprises in the world — last year the "big five" made $93 billion in profits, or $177,000 per minute. Even in my home state of California, which is at the forefront of environmental protections, Chevron is still the largest company by revenue (take that Apple and Facebook!). Many polluters have been claiming for decades that clean air standards will "cause entire industries to collapse," but those dire predictions have never come true. The idea that we have to choose between environmental protection and economic growth has always been a false choice.

Who is really to blame for high gas prices — and who stands to profit from that sick feeling you get when you're fueling your car and the price shoots past $40… $50… $60? Turns out an average vehicle uses $22,000 in gas over its lifetime, $15,000 of which (68 percent) goes right to oil companies. Further, an additional 25 cents in the price per gallon of gas at the pump every three months equals an additional $5 billionin profits for the big five oil companies.

Source: flickr/Jason Holmberg, Richmond, CA

Wouldn't it be nice to have some say in the matter? Some consumer choice? Unfortunately, most of us drive gas-powered vehicles and don't have any choice when we fill up. Big Oil has us in its grip: we pay what they say. The only way to lower prices in the long run, and reduce our vulnerability to price spikes, is to diversify our fuels and vehicle mix — exactly what new clean fuels policies will do in California.

Low income people and communities of color spend a much higher than averageportion of their monthly income on fuel, and are indeed the most over-burdened by high gas prices and vulnerable to unexpected price spikes. "Cheap gas" however, will not reduce their vulnerability in the long run.

Then there are the social costs of dirty fuels — the ones Big Oil isn't paying but everyone else is. The public health costs of air pollution and climate change. The poor and communities of color are especially prone to these costs, including high rates of lung and heart disease. In California, Latinos and African Americans account for nearly 75 percent of residents in the most polluted ZIP Codes — despite comprising only 44 percent of the state's population. According to the Environmental Protection Agency:

"African American children in California are four times more likely to be hospitalized for asthma compared to white children… African American and Latino children living in urban areas are two to six times more likely to die from asthma than whites."

Case In Point: California's Fight for Clean Fuels

So let's lift the mask off the latest masquerade of compassion: a last-ditch effort now underway by some oil companies and their political allies in Sacramento to derail the most comprehensive clean fuel policies in the country. Ironically, the policies they're attacking — the state's cap-and-trade program (C&T), which will include transportation fuels starting next year, and California's Low Carbon Fuel Standard (LCFS) — are already in place and working. And guess which constituency they are using to cover their political tracks? Spoiler alert: it's vulnerable communities.

The dirty fuels in California's transportation sector are the leading cause of pollution in the state — responsible for nearly 70 percent of smog-forming gases and 40 percent of climate change pollution.

By transitioning the state's transportation system to cleaner fuels, the C&T and LCFS will result in a cumulative public benefit of $23.1 billion by 2025. The C&T and LCFS together are projected to prevent 600 heart attacks, 880 premature deaths, 38,000 asthma attacks, and almost 75,000 lost work days as well as reduce consumption of 21.4 billion gallons of gasoline and 11.8 billion gallons of diesel fuel by 2025, according to a new report by EDF and the American Lung Association.

California is making waves (again) by leading the country with the most comprehensive climate, clean air, and clean fuels policies. By transitioning to cleaner fuels and vehicles, everyone will be less vulnerable to spiking oil prices and dirty air.

By attempting to rain on California's clean parade, Big Oil is using the same dirty tricks they've used for decades, and spinning a false story to try and derail these policies.

It's time these companies stop pretending to be champions for vulnerable communities; their oil-soaked billions and clouds of pollution spewing into low-income communities of color tell the real story.

Instead, maybe they should actually join the race toward a clean, healthy economy. We could use their technological prowess to help us get where we need to go. If they ever did that, then they could claim to be standing up for vulnerable communities — and really mean it.

This post first appeared on Huffington Post 

Also posted in Cap and trade, Clean Energy, Climate, Engaging Latinos, Global Warming Solutions Act: AB 32, Jobs, Transportation | Leave a comment

Mapping the California Companies Fueling a Cleaner Future

green roads mapClean energy and clean tech sound exciting, but most people don’t see these businesses as a major part of our economy, especially when traditional fossil fuels rule at the pump.

But thanks to policies like California’s Low Carbon Fuel Standard and cap and trade, more and more businesses are giving us options when we need to get from point A to point B, and they form an increasingly important source of economic growth in the state.  From cars running on used vegetable oil (biodiesel) to cars you can plug into your house, new and exciting innovations are fast coming to market.

The new interactive Green Roads Map that EDF created in partnership with CALSTART, Environmental Entrepreneurs (E2), and the Natural Resources Defense Council, shows that we have many emerging options for our cars and transportation fleets, and that clean transportation is a flourishing industry in California.

The Green Roads Map is more than just a collection of dots- the map presents an important picture of the investors, researchers, producers, and salespeople who are transforming our economy and transportation system today.

The companies listed on this map span four key sectors: energy efficiency & vehicles, fuels & infrastructure, education & consulting, and investment, showing just how diverse and expansive this industry is in the Golden State. From Electric Vehicles International based in Stockton to A-1 Alternative Fuels Systems based in Fresno, innovation in clean transportation is right in your backyard.

The interactive map allows any state legislator, business person, or interested California citizen to zoom in on their district or neighborhood and identify the clean energy businesses growing in their own communities.

For example, Californians living in the city of Stockton can use this tool to get information about green technology companies that are located right in their backyard, all of which are providing jobs and benefiting the local community. One of these companies is Community Fuels, a company working to make biodiesel a viable and scalable alternative to dirty fossil fuels through rigorous research and quality production. Alternatively, the residents of Foster City can discover that Motiv Power Systems is working to place clean and affordable electric school and shuttle buses on the roads.

Transportation is California’s biggest contributor to climate change and air pollution – the latter of which is a critical health problem for many of our communities. The good news is that this growing green transportation industry is incentivizing cleaner, more efficient transportation and helping to clear the air- a triple win for business, people, and our climate.

While opponents seeking to derail these policies ignore a thriving clean transportation sector built in-part on the expectation that these policies will continue, the Green Roads Map shows Californians why efforts to delay or revise cap and trade and the Low Carbon Fuel Standard undermine the burgeoning economic growth and compromise the health benefits that come along with these policies.

The 300 plus companies on the Green Roads Map are innovating and moving us forward to a clean and more independent energy future.

Check out our new interactive map and if you see a clean transportation company in your neighborhood missing, let us know.

Also posted in Cap and trade, Clean Energy, Climate, Global Warming Solutions Act: AB 32, Jobs, Low Carbon Fuel Standard, Transportation | Leave a comment

Supreme Court’s Low Carbon Fuel Standard decision: a victory for energy independence

By Erica Morehouse and Larissa Koehler

On this 4th of July week, a time of celebratory fireworks and barbeques, Americans commemorate our country’s hard-fought independence from colonial oppression. Americans are again working for greater independence, this time from fossil fuels that threaten our health, economic prosperity, and future. This week California won a pivotal legal challenge on this front.

Source: Flickr/johnkay

Source: Flickr/johnkay

Just three days ago, the U.S. Supreme Court refused to review a 9th Circuit Court of Appeals decision upholding California’s Low Carbon Fuel Standard (LCFS). The Rocky Mountain Farmer’s Union and the American Fuel and Petrochemical Manufacturers were seeking to overturn the sound and well-reasoned decision from the 9th Circuit. The High Court’s refusal affirms the legality of a vital policy that decreases our reliance on foreign oil by promoting alternative sources of energy while reducing climate and air pollution from our vehicles.

Read More »

Also posted in Clean Energy, Climate, Global Warming Solutions Act: AB 32, Litigation, Low Carbon Fuel Standard | Comments closed

To stay at the head of the class, California must focus on 2030 pollution goal

rp_erica-morehouse-287x377-228x3001.jpgTo be a class valedictorian, you can’t get an A on just one or two tests, or even in just the first quarter of a school year; being at the top means a concerted, continuous effort over the long-term.

For California to continue to be at the ‘head of the class’ on climate leadership, it must move forward on setting climate pollution reduction goals through 2030.

AB 32, the state’s landmark climate law, passed in 2006 and established a statewide emissions goal of reducing climate pollution to 1990 levels by 2020. California is well on the way to meeting that goal through a suite of policies, including cap and trade, which puts an absolute limit on this harmful pollution.

California was ahead of the curve, having passed a law in 2006 to stop unlimited climate pollution in the state. And since 2009 — spurred by AB 32 policies and a guarantee of reductions over a decade into the future — venture capital investments in California’s green sectors have grown by over 30 percent.

State legislators in California did not know what the energy landscape would look like in 2020 when they passed AB 32, but they set a goal and the state’s strong policies have helped to drive the growth of low-carbon energy sources around the country. For example, solar power generation in California has almost doubled in the last year, the cost of solar panel nationwide dropped 75% per watt from 2008-2011, and wind power generation has more than tripled in that time. Read More »

Also posted in Cap and trade, Clean Energy, Climate, Global Warming Solutions Act: AB 32 | Comments closed

The cheapest way to cut climate pollution? Energy efficiency

This blog post was co-authored by Kate Zerrenner, an EDF project manager and expert on energy efficiency and climate change.

On June 2, the U.S. Environmental Protection Agency made a historic announcement that will change how we make, move and use electricity for generations to come.

For the first time in history, the government proposed limits on the amount of carbon pollution American fossil-fueled power plants are allowed to spew into the atmosphere.

There are two clear winners to comply with the plan while maintaining commitment to electric reliability and affordability: energy efficiency and demand response.

We’re already seeing pushback from some of our nation’s big polluter states, such as West Virginia and Texas. But the truth is that while the proposed limits on carbon are strong, they’re also flexible.

In fact, the EPA has laid out a whole menu of options in its Clean Power Plan – from power plant upgrades, to switching from coal to natural gas and adopting more renewable energy resources. States can choose from these and other strategies as they develop their own plans to meet the new standards. Read More »

Also posted in Clean Energy, Climate, Energy Efficiency, Smart Grid | 1 Response, comments now closed

These women won't let the clean energy revolution pass their city by

WIPThis is the third in a series of posts about leading women in the power, environmental science, advocacy, policy, and business sectors. Each entry stands on its own, and you can view the first post here.

For many communities across the country that remain overburdened with pollution, the promise of clean energy and livable cities is far from fulfilled. From Los Angeles to Atlanta, people aspire to live in clean, vibrant environments where their children can grow up healthy and safe.Women often play a unique role in grassroots organizing, and they gain followers by connecting people’s aspiration for a more thriving community with the vision for a low-carbon, sustainable economy. I recently met two such activists who possess the passion, charisma, and savvy needed to make sure that their communities are not left out of the clean energy revolution. They work tirelessly to bring the benefits and opportunities of this rapidly growing economy to the places where they live.
Working for environmental justice in Los Angeles

A section of a Keep Pacoima Beautiful mural that pictures solar cells behind a bright light bulb that doubles as the sun

Veronica Padilla, executive director of Pacoima Beautiful, has dedicated her career to the nexus between urban planning and environmental justice in the industrial suburbs of Los Angeles’s Northeast San Fernando Valley, one of the most polluted regions of the state.

Veronica’s journey as an advocate for her community began with a move across town to study at University of California-Los Angeles, where she quickly observed a significant decline in “graffiti and allergies.”

Through her studies and own personal experience, Veronica began to identify just how disproportionately her community was affected by pollution because of how industrial facilities had been sited – near homes and schools. Read More »

Also posted in Clean Energy, Climate, Energy Efficiency | Comments closed

California and Quebec: Friends in Low (Carbon) Places

KHK pictureA crucial feature of the U.S. EPA’s groundbreaking new Clean Power Plan for existing power plants is the flexibility with which states can pick and choose the emission reduction measures that work best for them. Instead of prescribing a silver bullet solution across all fifty states, the new rule allows each state to tailor its policies, resulting in the most cost-effective solution to climate change.

According to EPA Administrator Gina McCarthy, this flexibility can mean collaborating with others in joint programs: “If states don’t want to go it alone, they can hang out with other states and join up with a multi-state market based program, or make new ones.”

For states thinking about cross-border collaborations to comply with the new rule, they can find a promising example in California.

In an announcement today, the California Air Resources Board (CARB) and the Ministry of Sustainable Development, Environment and the Fight against Climate Change (MDDLECC) of Quebec revealed that the two markets are taking the final step in linking their markets with the initiation of joint auctions. The first will be held in November, following a practice auction to be held in August. The practice auction will allow the program regulators, as well as auction participants, to get comfortable with the updated joint auction platform.

Not only is the Golden State leading the way in transitioning to a low-carbon economy ahead of EPA’s recently-announced power plant standards, but California is forging ahead to show that working across state lines on climate policies is possible – and can be productive. Read More »

Also posted in Cap and trade, Cap-and-trade auction, Clean Energy, Linkage | Comments closed

EPA Hands Over the Keys with Clean Power Plan, California Already on Cruise Control

rp_dWalker.jpgEPA’s Clean Power Plan, proposed today, is a roadmap for cutting dangerous pollution from power plants, and as with any map, there are many roads to follow. For this journey, states are in the driver’s seat and can steer themselves in the direction most beneficial to their people and to the state’s economy, as long as they show EPA they are staying on the map and ultimately reaching the final destination.

As usual, California got off to a head start, explored the territory, blazed a lot of new trails, and left a number of clues on how states can transition to a lower carbon future, and California’s successes are one proven, potential model for other states to follow. The state’s legacy of clean energy and energy efficiency progress is a big reason the White House and EPA could roll out the most significant national climate change action in U.S. history.

Way back in the mid-1970s, when Governor Jerry Brown did his first tour of duty, California pioneered what remains one of the most effective tools for cutting pollution and saving money:  energy efficiency. The state’s efficiency standards, largely aimed at buildings and appliances, have saved Californians $74 billion and avoided the construction of more than 30 power plants. All those energy savings have translated into California residential electricity bills that are 25% lower than the national average.  What’s more, California produces twice as much economic output per kilowatt hour of electricity usage as the national average.

While energy efficiency has done yeoman’s work pulling costs down, reducing the need for dirty energy, and supercharging the state’s clean energy economy, California has also brought bold approaches to cleaning up its power supply. The California Renewable Portfolio Standard (RPS) requires 33% of all electricity sold in California to come from renewable sources by 2020, the most aggressive of the 29 states with RPS measures on the books. Read More »

Also posted in Cap and trade, Clean Energy, Climate, Energy Efficiency, General, Global Warming Solutions Act: AB 32 | 1 Response, comments now closed

No Water Means No Beer, and Other Insights from an LA Water Conference

rp_Emily-Reyna-300dpi-716x1024.jpgBeer lovers – now that I have your attention – let’s talk water. Nowhere in the country is water more critical an issue and looming risk than in my home state of California… critical to farmers, utilities, businesses, and yes, even breweries. 

The current drought has brought a host of challenges for our growing state, including more wildfires, collapsing delta ecosystems and fisheries, decaying infrastructure and declining water quality. While California is on track to reduce carbon pollution due to our progressive climate and energy policies, our water challenges are the elephant in the room.

So it was inspiring to attend a daylong event convened by the Pacific Institute in Los Angeles, where leading corporate, nonprofit and technical water experts honed in on water stewardship and shared innovative solutions to the business and environmental challenges we face with regard to water scarcity.

The companies represented there – including AT&T, Deloitte, MillerCoors and Veolia – see water scarcity as a current business risk, as well as a critical component to economic growth in California, the Colorado River Basin and around the world. The World Economic Forum even ranked water crises as the third most pressing global risk for 2014. “Often, the greatest risks come from conditions over which the company has the least influence,” noted Jason Morrison of the Pacific Institute, whose Water Action Hub offers a powerful guide with tools and resources for collective action.

The day’s far-reaching discussion would be impossible to capture in a single blog post, so I'll highlight here just a few of the challenges and solutions that stuck with me after a full day of information sharing. Read More »

Also posted in Clean Energy, Energy Efficiency | Comments closed