California Legislators Want to Pass a Law That Requires Less Oil, More Clean Energy Use

Could drive up costs of driving, manufacturing


During his keynote address at a climate summit in Toronto last Wednesday, California Gov. Jerry Brown (D) described as "troglodytes" — i.e., willfully ignorant people — those Americans who deny the effects of global warming. "We have to redesign our cities, our homes, our cars, our electrical generation, our grids — all those things," he said, as he issued a "call to arms" for states to combat climate change.

We've all become accustomed to bold rhetoric from politicians. But while Brown talked about climate change, his allies in the Legislature were advancing a bill that tries to put many of his far-reaching goals into action.

SB 350, introduced by Senate President Pro Tempore Kevin de Leon (D-Los Angeles) imposes three significant clean-energy goals by 2030: Reducing the use of petroleum products in automobiles by 50 percent; increasing to 50 percent (from a current 33-percent goal) the amount of energy that uses renewable sources such as solar and wind power; and doubling energy-efficiency in current buildings.

These are aggressive mandates to reach in a relatively short time frame. "We need to break the stranglehold the profit-driven oil companies have on our economy and give consumers better options to power their homes and cars in cleaner, healthier and more sustainable ways," said De Leon after a key Assembly committee on Monday approved his bill.

Critics warn the bill would will crush business development and increase the costs of already-rising electricity, gasoline and other products. A new study by the Los Angeles County Economic Development Corp. detailed potential problems such a reduction would mean not just in the oil industry — but in related manufacturing and transportation sectors. These regulations threaten 11 percent of the state's jobs and more than 14 percent of its GDP, the study argues.

De Leon's office sent me a fact sheet debunking fears of economic harm: "California's GDP is nearly 30 percent higher than it was in 2006… Our GDP is growing while our emissions fall." The sheet also touts the prospects of a growing green economy. Business leaders say the economy isn't growing as rapidly as it should, there's insufficient growth in the high-paying manufacturing sector, and green jobs are only a fraction of the economy.

It's hard to argue the economics of these regulations because the bill only sets standards — and then gives the California Air Resources Board broad authority to achieve the goals. "Without legislative guidance or protections against increased costs or job loss, what tools could CARB employ to meet the reduction mandate?" asks the California Chamber of Commerce. The chamber raises the possibility of gasoline rationing, which may be a scare tactic.

Jay McKeeman, vice president of the California Independent Oil Marketers Association, expects the state to come up with a credit system similar to cap-and-trade. Oil producers would have to bid for a limited number of credits after petroleum use is capped. Those credits will become pricey — and the end result will be a new tax on gasoline. California's per-gallon gas prices already are around 70 cents higher than the national average. "Suddenly, every aspect of the economy is regulated by CARB (if SB 350 passes)," said California Business Roundtable President Rob Lapsley.

McKeeman expects more land-use controls of the sort we're already seeing, where the state limits the ability of local governments to allow developments that are not high density. The idea is to force Californians into smaller homes and to rely more on public transit systems, such as light-rail lines and eventually high-speed rail.

One largely unaddressed concern is the impact on the poor. Poor and middle-class workers drive older cars and can't afford to buy pricey new electric ones. That's why, as this column previously reported, CARB plans to provide highly subsidized hybrids to lower-income people. But it's hard to believe that subsidies will do more than minimize the pain.

Robert Michaels, economics professor and energy expert at Cal State Fullerton, expects future legislatures and governors to pass stopgap measures and fudge the numbers to help the state meet these potentially unrealistic goals. "It's one of those things you have in the (news)paper and you say, 'Yes, people will pass it and let's hope it will be meaningless.'"

That leaves my fellow "troglodytes" hoping SB 350 is as meaningful as that resolution calling on the state to divest from investments in Donald-Trump-owned businesses.

Greenhut is the California columnist for the San Diego Union-Tribune. Write to him at