Energy Exchange

Much has been written about the causes of the recent downturn in world oil prices. So it shouldn’t be much of a surprise to hear that many places which derive a significant share of their economic activity from oil production have begun to feel the effects of this downturn.

As less money is taken from the sale of each barrel of oil produced, both major and local economies alike – from Alberta, to Texas, the Middle East, and Kern County – have seen a rapid decline in their tax base and overall economic output. In some cases, the drop in oil money has been so rapid and significant that some jurisdictions have declared fiscal emergencies.

Whether from layoffs at oil and gas operators, or government program cuts due to reduced tax collection, the downturn associated with reduced oil and gas profits shows just how fragile, and damaging, the fossil fuel-based economy can be. Just as families are hit in the pocketbook when prices at the pump shoot up, so too are many family livelihoods hurt when prices plummet. With this lose-lose proposition, we need to know now: are other options available?

Thankfully, there is another way. A new report released today from the fuels and energy consulting firm Promotum, (commissioned by Environmental Defense Fund, Natural Resources Defense Council, and Union of Concerned Scientists) shows that an abundance of locally-based, alternative fuels is on the horizon. According to Promotum, the state is on track to achieve significant fuel diversification by 2020 and cut carbon emissions associated with fuel production and use. This positive forecast also means we can expect prolonged domestic economic growth from emergent alternative fuel companies up and down the state. Read More »

Make no mistake, California is a leader when it comes to improving air quality and deploying unprecedented amounts of cleaner, low-carbon fuels. However, despite years of efforts to cut vehicle emissions and reduce fossil fuel consumption, California remains in the top spot nationally for gasoline use, and is home to the top five most polluted cities in the country.

In addition, as the state and surrounding region continues to cut petroleum usage and clean up the environment – yielding major climate benefits – economic growth in emerging markets across the world means that our efforts are being undercut by increases in use elsewhere.

For California to truly deliver in in the fight against climate change, we must not only cut fossil fuel use and deploy cleaner alternatives at home, but also create solutions that deliver benefits abroad. In other words, we should aim to export our best transportation policies abroad – the ones that have helped California reduce fossil fuel use yet still help foster economic opportunities and growth.

A range of current policies are helping drive new technologies that yield low carbon vehicles and fuels

Over the past 15 years, California has given birth to the some of the most ambitious and successful climate change related transportation policies imaginable. For example, in 2002 the legislature adopted the Pavley Clean Cars law (AB 1493) which set greenhouse gas standards for automobiles. This law eventually led to new national vehicle efficiency standards and the production of a new wave of more efficient and cleaner cars and trucks.

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These days there seems to be steady stream of stories coming from Washington D.C. that are of interest to California, from national standards on trucks to new regulations covering existing emissions sources under the Clean Power Plan. However, the story treadmill runs in reverse too, as evidenced by the attention being paid to California’s world-leading climate program, AB 32, which is being fully implemented during a time of strong economic recovery in the Golden State.

In February 2015, the U.S. Environmental Protection Agency (EPA), The Climate Registry, the Center for Climate and Energy Solutions, and the Association of Climate Change Officers will host the Climate Leadership Conference in Washington D.C and California’s AB 32 story and success will be on full display.

At the CLC in Pentagon City, taking place February 23^rd through 25^th, hundreds of policy makers, businesses, and advocates from across the nation will learn about and discuss efforts that are leading the way on climate solutions. As part of that discussion, the California story – from cap and trade to the Low Carbon Fuel Standard – will be showcased and broadcast in a multi-hour seminar, connecting state-level solutions to national decision makers.

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Just over two years ago, the California Manufacturers and Technology Association (CMTA) hired Andrew Chang and Company, LLC, a Sacramento-based economics consulting firm, to produce a report titled “The Fiscal and Economic Impact of the California Global Warming Solutions Act of 2006.” Though one might hope a report of this nature would deliver honest analytics and academic rigor, EDF economists found it to be an all-out attack on California’s AB32 law, thinly disguised as a credible analysis, and based on a fundamental misunderstanding of basic economic principles, misguided modeling assumptions, faulty calculations, and a willful disregard for the potential benefits of environmental regulation.

Fast forward to September 2014, and now the California Drivers Alliance, an organization organized and funded by a collection of oil producers known as the Western States Petroleum Association (WSPA), has taken a deceitful page out of CMTA’s playbook. This time though, the deceptive report comes from Andrew Chang’s former business partner, Justin L. Adams, now at Encina Advisors. The report – “Placing Fuels Under the Cap: The Economic Impact to California” – again concludes AB32 will be destructive to the economy, while ignoring the wage gains many Californians will receive from higher-paying jobs in California’s emerging clean energy economy.

While there are more holes in this latest report than in a block of Swiss cheese, here are three of the biggest ones: Read More »

This summer I had the unique opportunity to drive with members of the California state legislature through their districts in Los Angeles and the Central Valley. In addition to brown lawns, hazy air, and intense heat, we were reminded of California’s persistently high gas prices on filling station signs at nearly every major intersection.

Fuel hoses from a gas station. Source: Flickr/Boegh

As we drove through many neighborhoods struggling to pull themselves up economically, the need for solutions was clear. Since lower-income households pay the same amount per gallon as people in more affluent neighborhoods, low-income households tend to devote a greater percentage of their monthly income toward fuel purchases. Furthermore, since new and more efficient cars are usually more expensive, low-income households tend to drive older, less efficient vehicles that use more gas and release more pollution. So, while families across California are cutting back on things like watering their lawns, they are forced to spend a lot of these savings filling up their cars, while also breathing some of the most polluted air in the nation.

Fortunately, there is a solution at California’s fingertips that will tackle the issues of gas prices and pollution at the same time: transportation diversification. This simply means providing all Californians with choices on how to get where they need to go. These choices can take the form of alternatives to gas and diesel, alternatives to inefficient vehicles, and alternatives to cars all together. By providing these choices, consumers can pick what works for them – allowing the entire transportation system to better meet people’s unique needs and budgets. Read More »

By Tim O’Connor with Larissa Koehler and Jorge Madrid

EPA recently proposed a final pollution reduction rule for refineries that will help cut toxic air emissions and improve monitoring at the nation’s largest industrial facilities. This new rule is an important complement to the state level carbon and air pollution limits we have in California, and together will make our state cleaner, healthier, and more prosperous.

Source: flickr/Jason Holmberg, Richmond, CA

Any doctor will tell you that to fight the toughest diseases you often need a combination of treatment options. The clean air laws we have in California are an indispensable part of the cure for our air pollution problems. But to be fully effective, they need complementary policies from Washington.

Central to the challenge is the fact that large refineries are all too often found in disadvantaged communities – and release greenhouse gases, carcinogens, neurotoxins, and hazardous metals. Even though our state has been regulating refineries for decades, millions of Californians are still exposed to dirty, dangerous air. The puzzle of how to protect our communities is still missing pieces.

What is needed is direct federal attention to oil refineries. With an EPA standard that is based on the most up-to-date pollution control technology and a new health impact analysis, we can cut pollution and ensure the communities living next to refineries have healthier air and more information about what they’re breathing. Read More »